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Housing market: Redfin says some home prices drop amid ‘softening’ demand

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Early data show signs that the nationwide housing market may be beginning to soften as mortgage rates soaring affect buyers’ demand.

But that doesn’t necessarily mean that home prices are about to fall. High demand areas like Utah.. here, Due to years of housing shortages, inventories are very lowThe expert said Rising mortgage rates will only delay the rise in home prices and will not stop...

As The average lending rate for fixed-rate mortgages for 30 years reached 5% this week With the upward revision of the Federal Reserve Board, homebuyers’ demand is starting to slump — and it is urging more sellers to lower their asking prices. New report released Thursday by national real estate agency Redfin..

Early signs of the “softening” housing market

Spring is usually the time for more sellers and buyers to look to the market, but this spring’s new listing is down 7% year-on-year as the median asking price rose 14% year-on-year to $ 397,747. bottom. As a result, typical homebuyers’ monthly payments have risen 35% year-over-year to a record $ 2,288, since mortgage rates were just above 3%, Redfin said. I reported.

Using data from more than 400 US metropolitan areas during the four weeks leading up to Sunday, the Redfin report “shows that demand is usually softening when it occurs,” some early days. The index of is also quoted. They include:

  • Few people searched for “houses for sale” earlier this month. The number of searchers during the first full week of April fell by 3% from this time last year.
  • Redfin’s Seasonally Adjusted Home Buyer Demand Index, an indicator of requests for home tours and other home buying services from Redfin agents, is also 3 in the last four weeks, compared to a 5% increase over the same period in 2021. % Decreased.
  • Mortgage purchase offers were down 6% from last year, but the seasonally adjusted index increased weekly by 1% for the week leading up to April 8.

Redfin is also monitoring “accelerating share of home listings with price cuts rising at the fastest spring pace since at least 2015, another sign that demand isn’t meeting sellers’ expectations.” The report states.

How many sellers are lowering their prices?

Other important findings of the report are:

  • On average, 3.2% of homes for sale each week have fallen, and 13% have fallen in the last four weeks. This has increased from 10% a month ago to 9% a year ago.
  • The share of properties with price cuts has risen faster during this period than since 2015. Generally, the share of homes with price cuts during this period is declining slightly each month.
  • The number of homes on the active list or for sale decreased by 23% year-on-year.

“The market has seemed endless over the past few years, but homebuyers’ demand is really limited,” Redfin Chief Economist Darryl Fairweather said in a report.

“The sharp rise in mortgage rates is pushing more homebuyers out of the market, but it also seems to discourage some homeowners from selling.”

But that doesn’t mean that the US housing market is about to change dramatically.

“It is unlikely that the market will soon change from a seller’s market to a buyer’s market because both supply and demand are declining,” Fairweather said.

Bid war, super high speed sales continue

Despite these early signs of a chill in the housing market, Redfin reports that the market remains “housing” as housing continues to be robbed at a shocking rate amid a bidding war and record price increases. It’s hotter than ever for buyers. ”

According to a Redfin report, homes sold had a median of 18 days, down from 26 days last year.

In addition, 45% of contracted homes found buyers within a week, and the average home sold was 2.4% above the asking price, a Redfin report said.

“If a home is on the market for more than a week, people start to wonder why it’s wrong or something is wrong,” Redfin Boston real estate agent James Gulden said in a report. increase.

According to a Redfin report, the bidding war continues to cause fierce competition, with 54% of homes above listing prices, up 42% year-on-year, just below the all-time highs seen in July 2021.

However, some buyers are tired of playing the game.

“All the offers I wrote recently faced multiple offers, but in the end some have fully participated in and withdrawn from all the competition,” said Garden. “They are less willing to make dangerous offers in the context of a stressful bidding war.”

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