The latest pulse reading in the US housing market shows signs of change – but still little price relief for buyers.
The number of home sellers who lowered their asking price hit a six-month high of 15% in a four-week period ending May 1, up from 9% a year earlier, according to the latest report from Redfin released on Friday.
It is the largest annual gain ever recorded in Redfin’s weekly housing data, tracked through 2015.
But that doesn’t mean homebuyers are seeing much relief as the U.S. housing market continues to see record prices.
Why prices are still high: Supply continues to lag far behind demand as buyers continue to outnumber sellers, so “the typical home is flying off the market at the fastest rate ever and for more than its price.” asked,” Redfin reported.
“Homebuyers continue to be pressured in almost every possible way, causing some to take a step back from the market,” Redfin chief economist Daryl Fairweather said in a statement released Friday.
“Unfortunately for buyers hoping to strike a deal as competition cools, sellers are pulling back even faster, keeping the market deep in sellers’ territory,” Fairweather said. “So even though price drops are becoming more common, most homes are still selling above asking price and in record time.”
By the numbers: The median home sale price rose 17% year-over-year in the four weeks to May – the biggest increase since August – to a record high of $396,125, a reported Redfin.
- As for the median asking price for newly listed homes, it rose 16% year-over-year to $408,458, which is a new all-time high, according to data from Redfin.
Meanwhile, pending home sales fell 4% year over year, the biggest drop since mid-February. And new home listings for sale were down 6% year over year and have remained down since mid-March.
- Open listings, or the number of homes listed for sale at any time during the four-week period ending May 1, fell 18% year-over-year, even though spring is supposed be the busiest time to buy a home.
Homes continue to fly off the market at an astonishing rate. Forty-two percent of homes that closed in the same period had an offer accepted within a week of going on the market. Fifty-six percent had an offer accepted within the first two weeks.
And the majority of homes listed are selling above list price. A record 56% of homes sold above asking price in the four weeks to May 1, up from 47% a year earlier, according to Redfin.
Mortgage impact: The monthly mortgage payment on the median asking price also hit an all-time high: $2,404 at the current mortgage rate of 5.27%, according to Redfin. That’s a 42% increase—also an all-time high—from $1,688 the year before, when mortgage rates were below 3%.
Housing forecast 2022: National economists warn of an “uncertain” period facing the housing market.
This week, the National Association of Realtors’ chief economist, Lawrence Yun, said record inventories, inflexible inflation and pressure from the Federal Reserve’s interest rate hikes are throwing “curve balls” on the market.
However, interest rate hikes have not dampened the cost of housing, as low inventories continue to drive up prices amid persistent demand. Buying a home today is 55% more expensive than a year ago, according to calculations by the National Association of Realtors.
Zillow stock drops: As mortgage rates rise and the housing market cools, Zillow’s stock has fallen 9% this week. The online real estate giant is expecting weaker-than-expected income as mortgage rates slow the housing market.
However, Zillow executives also note that the housing market faces a landscape of uncertainty.
“With widely varying forecasts, one thing is clear about the housing market in 2022 and that is that the way forward is uncertain.” Zillow said in a letter to shareholders, TheStreet reported. “While it is clear that people still have a strong interest in moving, growth trends in the total value of consumer transactions are moderating.”