Housing market: Record share of housing prices falls, says Redfin

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The latest heart rate reading in the US housing market shows signs of a shift – but still little price relief for buyers.

The number of home sellers who have slashed their asking price rose to a six-month high of 15% in a four-week period ended May 1 — up from 9% a year earlier, according to the latest report from Redfin released on Friday.

That’s the largest annual gain recorded in Redfin’s weekly housing data, which tracked through 2015.

But that doesn’t mean homebuyers are seeing much relief as the US housing market continues to see record home prices.

Why prices are still high: Supply continues to lag far behind demand as buyers continue to outpace sellers, leaving “the typical home flying off the market at the fastest rate on record and for more than its asking price,” Redfin reported.

“Homebuyers continue to be pressured in just about every way imaginable, prompting some to pull out of the market,” Redfin chief economist Daryl Fairweather said in a statement released Friday.

“Unfortunately, for buyers hoping to find a deal as competition cools, sellers are retreating even faster, keeping the market deep in seller territory,” Fairweather said. “Although price falls are becoming more common, most homes are still selling above asking price and in record time.”

Using the numbers: The median home selling price rose 17% year over year in the four weeks through May — the biggest increase since August — to a record $396,125, Redfin reported.

  • The median asking price for newly listed homes is up 16% year over year to $408,458, which is a new all-time high, according to Redfin’s data.

Meanwhile, pending home sales fell 4% year over year, marking the biggest drop since mid-February. And new listings of homes for sale are down 6% year over year and have declined since mid-March.

  • Active listings, or the number of homes for sale at any time during the four-week period ended May 1, fell 18% year over year — although spring is said to be the busiest time for home buying.

Homes continue to fly off the market at an amazing rate. Forty-two percent of homes signed during the same period had an offer accepted within a week of launch. 56 percent had accepted an offer within the first two weeks.

And a majority of the homes listed are selling above list price. A record 56% of homes sold above asking price in the four weeks ended May 1, up from 47% a year earlier, Redfin says.

Impact on mortgages: The monthly mortgage payment at the median asking price for a home also rose to a record high: $2,404 at a current mortgage rate of 5.27%, Redfin says. That’s up 42% — also an all-time high — from $1,688 last year when mortgage rates were below 3%.

Housing 2022 prognosis: National economists warn of an “uncertain” time on the housing market.

This week, National Association of Realtors chief economist Lawrence Yun said record-low inventories, unrelenting inflation and pressure from Federal Reserve rate hikes are throwing “curveballs” into the market.

Rate hikes have not dampened housing costs, however, as low inventories continue to push prices higher amid continued demand. According to the National Association of Realtors, buying a home is 55% more expensive today than it was a year ago.

Zillow stick falls: As mortgage rates rise and the housing market cools, Zillow’s stock fell 9% this week. The online real estate giant expects lower-than-expected earnings as mortgage rates slow the housing market.

However, Zillow executives also note that the housing market faces a landscape of uncertainty.

“With widely differing forecasts for the 2022 housing market, it is clear 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 for consumers’ total transaction value are weakening.”

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