free counter
Business

Prospective Home Sellers and Buyers Retreated in August as Mortgage Rates Approached 6%

New listings fell 8% in August with their lowest level since May 2020. Before the onset of the pandemic, the final time so few homes to enter the market was August 2012

SEATTLE–(BUSINESS WIRE)–(NASDAQ: RDFN) Seasonally-adjusted new listings of virginia homes fell 8% from July to August with their lowest level since May 2020, once the housing marketplace was paralyzed by the onset of the COVID-19 pandemic, in accordance with a fresh report from Redfin (redfin.com), the technology-powered property brokerage. Before the pandemic, we hadnt seen so few homes to enter the market since November 2012.

Mortgage rates climbed from 5% at the start of August to 6% by the finish of the month, pushing many homebuyers out from the market. This sharp reduction in demand gave the buyers who have been left some additional negotiating power and softened home prices a little, but caused many potential home sellers to carry off on listing. Consequently, the market all together is relatively balanced between buyers and sellers, but theres hardly any activity with regards to homes being listed and sold.

When mortgage rates were below 3%, sales and home prices soared. The marketplace was such as a game of musical chairs with buyers vying for too little homes, said Redfin Chief Economist Daryl Fairweather. As mortgage rates approached 6%, everyone left the party. Now the marketplace is similar to a middle school dance in which a few buyers and sellers are pairing up throughout a slow song.

While we might maintain a real estate recession, the slowdown in sales isn’t an indicator of a bubble bursting, Fairweather continued to describe:

The end result is that homeowners dont have to sell in this environment. They locked in rock-bottom mortgage rates this past year and so are sitting on piles of equity. The jobs market remains quite strong, so theres little risk that mortgage delinquencies or foreclosures will rise significantly. It could have a severenot softrecession to send homeowners into distress. We shall need to wait if the broader economy steers towards normalcy or recession in the upcoming months.

National Highlights

Market Summary

August 2022

Month-Over-Month

Year-Over-Year

Median sale price

$406,900

-1.3%

7.1%

Homes sold, seasonally-adjusted

500,100

-1.7%

-19.5%

Pending sales, seasonally-adjusted

489,200

0.2%

-17.3%

New listings, seasonally-adjusted

534,322

-8.2%

-20.2%

All Virginia homes, seasonally-adjusted

1,524,400

-1.1%

2.7%

Median days on market

26

5

9

Months of supply

2

-0.2

0.6

Sold above list

37.6%

-9.6 pts

-14.3 pts

Median Off-Market Redfin Estimate

$417,800

-0.9%

18.2%

Average Sale-to-list

99.9%

-1.1 pts

-1.7 pts

Average 30-year fixed mortgage rate

5.22%

-0.19 pp

+2.38 pp

pp = percentage-point change

Metro-Level Highlights

Competition

  • Indianapolis, Grand Rapids, MI and Rochester, NY were the fastest markets, with 1 / 2 of all homes pending sale in only 8 days. Albany, NY and Omaha, NE were another fastest markets with 9 and 10 median days on market.
  • Probably the most competitive market in August was Rochester, NY where 73.0% of homes sold above list price, accompanied by 72.4% in Buffalo, NY, 65.8% in Newark, NJ, 65.2% in Hartford, CT, and 62.8% in Worcester, MA.

Prices

  • Cape Coral, FL had the country’s highest price growth, rising 20.6% since this past year to $392,000. Knoxville, TN had the next highest growth at 20% year-over-year price growth, accompanied by Tampa, FL (19.7%), North Port, FL (19.5%), and West Palm Beach, FL (19.2%).
  • 4 metros saw year-over-year price declines in August including SAN FRANCISCO BAY AREA (-7.3%), Oakland, CA (-3.2%), Baton Rouge, LA (-1.1%), and Honolulu (-0.6%).

Sales

  • No metro areas had year-over-year sales growth in August. The tiniest declines were in Dayton, OH, down 1.4%, accompanied by Greenville, SC, down 2.7%. Rochester, NY rounded out the very best three with sales down 3.7% from the year ago.
  • NEVADA saw the biggest decline in sales since this past year, falling 37.2%. Home sales in San Jose, CA and Phoenix declined by 33.8% and 31.9%, respectively.

Inventory

  • North Port, FL had the best increase in the amount of virginia homes, up 51.2% year over year, accompanied by Austin, TX (39.5%) and Nashville, TN (38.0%).
  • Allentown, PA had the biggest reduction in overall active listings, falling 44.5% since last August. Bridgeport, CT (-29.7%), Hartford, CT (-27.0%), and Montgomery County, PA (-26.8%) also saw far fewer homes in the marketplace when compared to a year ago.

To see the entire report, including charts, metro-level data and methodology, please visit: https://www.redfin.com/news/august-housing-market-slowed-by-high-mortgage-rates/

About Redfin

Redfin (www.redfin.com) is really a technology-powered property company. We help people look for a spot to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for additional money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a house can take an instantaneous cash offer from Redfin or have our renovations crew fix up their house to sell for top level dollar. Our rentals business empowers millions nationwide to get apartments and houses for rent. Since launching in 2006, we’ve saved customers a lot more than $1 billion in commissions. We serve a lot more than 100 markets over the U.S. and Canada and employ over 6,000 people.

To find out more or even to contact an area Redfin agent, visit www.redfin.com. To understand about housing marketplace trends and download data, go to the Redfin Data Center. To be put into Redfin’s news release distribution list, email press@redfin.com. To see Redfin’s press center, just click here.

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

Released September 16, 2022


Read More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker