The power pendulum began moving from home sellers towards home buyers during May.
Changing Homebuying Activity
Due primarily to rising interest rates that are impacting home buying decisions within all market price points, homebuyers are backing off. Redfin’s Homebuyer Demand Index dropped -12% the week ending June 5 amid 21% of sellers dropping their list price.
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Take a look at the changes in homebuying activity:
- For-sale home searches on Google dropped -10% y/y during the week ending June 4.
- The Redfin Homebuyer Demand Index dropped -12% y/y during the week ending June 5 for the eighth consecutive week of demand declines.
- ShowingTime indicated that home touring activity as of June 5 was +0.1% from the beginning of 2022 compared to +25.1% at the same time one year ago.
- Mortgage purchase applications dropped -21% y/y and -7% w/w during the week ending June 3.
- Mortgage interest rates on the 30-year fixed came in at 5.23% for the week ending June 9.
Redfin’s Market Takeaways for 400+ Metro Areas
For the four-week period ending June 5, Redfin indicated:
- Median home sale price hit record of $401,372, an increase of +15% y/y
- Median asking price of newly listed homes hit $417,950, an increase of +17% y/y
- Monthly mortgage payment on median asking price home jumped to $2,428 with a mortgage rate of 5.23%. This $2,428 monthly mortgage payment represents an eye-popping increase of +42% y/y from $1,710 when rates were 2.96%.
- Pending home sales declined -8% y/y.
- New listings of for-sale homes declined -1% y/y.
- Active listings dropped -8% y/y.
- Homes that sold were on the market for a record-low median of 15 days compared to 18 days one year ago.
- 56% of homes sold above list price compared with 52% on year ago.
- 2% of for-sale homes experienced a price cut during the four weeks ending June 5, compared with 15.2% receiving a price cut one month earlier and 10.3% receiving a price cut one year ago.
- The average sale-to-list price ratio came in at 102.7%, up from 101.9% one year ago.
Thanks to Redfin.
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