RDFN Redfin Corporation

High housing costs—and high temperatures—are keeping prospective homebuyers on the sidelines, making it more common for homes to sell below list price. This could be a sign that home-price growth will lose momentum in the coming months.

(NASDAQ: RDFN) — The typical U.S. home that sold during the four weeks ending June 23 sold for 0.3% less than its asking price, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This marks the first time the typical home has sold under list price this time of year since the onset of the pandemic in 2020, when the housing market nearly ground to a halt. The typical home sold for exactly its list price one year ago, and roughly 2% above its list price two years ago.

Additionally, just under two-thirds (32.3%) of U.S. homes sold over asking price during that period. That’s the lowest share of any June since 2020, and down from 36% a year earlier. Nearly 7% of home sellers dropped their asking price, on average, the highest level since November 2022 and up from 4.7% a year ago.

The likelihood of homes selling below asking price is rising because there’s more supply than demand, at least for certain types of homes in certain parts of the country. New listings are up 8.2% year over year nationwide, while pending home sales are down 4.3%, the biggest decline in four months. Most inventory is growing stale; over 60% of homes are listed for at least a month without going under contract.

Buyers are shying away due to sky-high housing costs. The median home-sale price is up 4.9% year over year to an all-time high of $397,250. While mortgage rates have come down from May’s six-month high, the weekly average is still near 7%. The typical homebuyer’s monthly payment is $2,785, just about $50 below the record high.

Record-breaking heat is another reason some buyers have taken a backseat recently. “I’ve heard some clients say, ‘it’s so hot outside I don’t want to see anything,’” said Joe Hunt, a Redfin manager in Phoenix. “But if mortgage rates were lower, I doubt heat would be keeping buyers away.”

Buyers may get a slight respite soon on costs soon. The growing likelihood that homes sell below asking price, along with the high share of sellers dropping their prices, could mean sale-price growth loses momentum. Plus, mortgage rates may decrease further if inflation continues to cool.

Redfin agents say both buyers and sellers should be realistic about prices in today’s market. Sellers shouldn’t overprice, and buyers should know they may be able to negotiate— but only if a home has been on the market without much activity for at least a few weeks.

“Some buyers think they can get a deal because they’re hearing the market is cool, and some sellers think every home will sell for top dollar no matter the condition,” said Marije Kruythoff, a Los Angeles Redfin Premier agent. “In reality, everything depends on the house and the location. The hottest properties in this area are either move-in ready or complete fixer-uppers. The homes in between, those that are pretty nice but not updated, are sitting on the market longest. Sellers of that type of home often benefit from making cosmetic repairs before listing, which we offer through Redfin Concierge Service. And buyers who do encounter middle-of-the-road listings without much wow factor should consider trying to negotiate.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity

 

Value (if

applicable)

Recent change

Year-over-year

change

Source

Daily average 30-year

fixed mortgage rate

7.06% (June 26)

Up from a 3-month low of 6.97% a week earlier, but down from a 5-month high of 7.52% 6 weeks earlier

Up from 6.91%

Mortgage News Daily

Weekly average 30-year

fixed mortgage rate

6.87% (week ending June 20)

Lowest level since week ending April 4

Up from 6.67%

Freddie Mac

Mortgage-purchase

applications (seasonally

adjusted)

 

Increased 1% from a week earlier (as of week ending June 21)

Down 13%

Mortgage Bankers Association

Redfin Homebuyer

Demand Index

(seasonally adjusted)

 

Up 5% from a month earlier (as of week ending June 23)

Down 14%

Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents

Touring activity

 

Up 27% from the start of the year (as of June 23)

At this time last year, it was also up 15% from the start of 2023

ShowingTime, a home touring technology company

Google searches for

“home for sale”

 

Unchanged from a month earlier (as of June 24)

Down 15%

Google Trends

Key housing-market data

U.S. highlights: Four weeks ending June 23, 2024

Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.

 

Four weeks ending June 23, 2024

Year-over-year change

Notes

Median sale

price

$397,250

4.9%

All-time high; biggest increase since March

Median asking

price

$414,975

6.1%

Biggest increase since October 2022

Median monthly

mortgage

payment

$2,785 at a 6.87% mortgage rate

7.5%

$54 below all-time high set during the 4 weeks ending April 28

Pending sales

85,246

-4.3%

Biggest decline in 4 months

New listings

100,545

8.2%

Biggest increase in 2 months

Active listings

953,300

16.9%

 

Months of

supply

3.3

+0.6 pts.

4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions

Share of homes

off market in

two weeks

41.4%

Down from 46%

 

Median days on

market

31

+4 days

 

Share of homes

sold above list

price

32.3%

Down from 36%

 

Share of homes

with a price drop

6.7%

+2 pts.

Highest level since November 2022

Average sale-to-

list price ratio

99.7%

-0.3 pts.

 

Metro-level highlights: Four weeks ending June 23, 2024

Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.

 

Metros with biggest year-over-

year increases

Metros with biggest year-over-year

decreases

Notes

Median sale price

Anaheim, CA (16%)

Nassau County, NY (14.4%)

New Brunswick, NJ (13.8%)

Newark, NJ (13.6%)

West Palm Beach, FL (12.7%)

San Antonio (-2.5%)

Austin, TX (-2.5%)

Dallas (-0.9%)

Fort Worth, TX (-0.8%)

 

 

 

Declined in 4 metros

Pending

sales

San Jose, CA (14.7%)

Pittsburgh (5%)

San Francisco (4.5%)

Anaheim, CA (3.4%)

Columbus, OH (2.7%)

Houston (-15.1%)

West Palm Beach, FL (-14.9%)

Atlanta (-12.2%)

San Antonio (-11.4%)

Miami (-11.2%)

Increased in 11 metros

New listings

San Jose, CA (40.6%)

Miami (22.4%)

San Diego (20.8%)

Anaheim, CA (19.3%)

Phoenix (19.2%)

Chicago (-7.6%)

Atlanta (-7.5%)

Detroit (-2%)

Minneapolis (-0.8%)

Portland, OR (-0.4%)

Declined in 5 metros

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-homes-selling-below-asking-price-june-2024

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627936271/en/

Redfin Journalist Services: Kenneth Applewhaite press@redfin.com