April’s Easter and Passover holidays exacerbated a softening in buyer demand as sellers began cutting their list prices.
More Buyers Moved to Sidelines in April
Redfin’s Homebuyer Demand Index, a measure of requests for home tours and other home-buying services, declined -4% y/y during the April’s Easter and Passover holiday week. This slump in homebuyer demand was the first such slump since June 2021. Mortgage purchase applications, down -14% from one year ago, and online searches for “homes for sale” also slumped during this time period.
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As mortgage interest rates surged past 5% and the median home price jumped +17% y/y to a record high of $392,750, according to Redfin, more homebuyers checked out of the market and moved to the sidelines. Such interest rate and price jumps sent the typical homebuyer’s monthly payment to an all-time high of $2,318, an increase of +38%.
“The lull in homebuying and selling activity that we saw over Easter and Passover is likely to continue well past the holiday weekend,” said Daryl Fairweather, Redfin’s Chief Economist. “The forces causing many homebuyers to pump the brakes are still in place – increasing mortgage rates and record-high home prices. We expect price increases to slow and buyers in bidding wars to face fewer competition offers, but substantial relief for homebuyers is unfortunately still well beyond the horizon since the housing market is still tilted further in sellers’ favor than at any time in history.”
Asking Prices Slightly Dropped in Mid-April
Approximately 1 in 8 sellers cut their list prices during the four weeks ending April 17, according to Redfin.
This was the highest share of list prices that received a pruning in five months.
On average, 3.3% of for-sale homes had a price drop each of the four weeks ending April 17 that Redfin analyzed. Overall, 13% of for-sale listings saw price drops in those past four weeks. This was the highest share of price drops since the end of November.
Key Housing Market Takeaways in 4-Week Period Ending April 17
- Median sale price hit record $392,750, an increase of +17% y/y and the biggest increase since August
- Median asking price of newly listed homes hit $399,225, an increase of +14% y/y
- Monthly mortgage payment on median asking price home at the current 5.11% mortgage rate hit $2,318, an increase of +38% from one year earlier
- Pending home sales down -2% y/y
- New listings down -8% y/y, the biggest drop since early February and the 22nd straight annual decline
- Active listings down -21% y/y
- DOM for median of 17 days, down from 24 days one year earlier
- Record 58% of homes went under contract within first 2 weeks
- Record 44% of homes went under contract within i week
- Record 54% of homes sold above list price
- Average sale-to-list price ratio rose to all-time high of 102.5%
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Thanks to Redfin.