Redfin reports that mortgage rate hikes continue to cool home buying and selling

(NASDAQ:RDFN) – A holiday weekend hike in mortgage rates has sucked much of the remaining energy from the housing market, according to a new report report by Redfin (redfin.com), the technology-supported real estate agency.

Home visiting activity took a nosedive, and the proportion of sellers cutting their price remained near a record high. Fewer homes have sold above list price since February 2021 than ever before as a result of falling demand, and the average sale-to-list price ratio fell to its lowest level since March 2021. The typical home selling in the four weeks ended September 4 was went 0.3% below its final list price after a year and a half of average home sales above list price.

It appears that rising mortgage rates and falling demand have also discouraged homeowners from entering the market, as new registrations fell 18% year over year.

“The housing market always cools off this time of year, but this year I expect the fall and winter to be particularly cold as sales dry up more than usual,” said Redfin chief economist Daryl Fairweather. “Thanks in large part to mortgage rates close to or even exceeding 6%, prospective homebuyers and sellers are focusing on the back-to-school season and enjoying the final days of summer, rather than ending up in an uncertain market. It may feel like playing roulette when it comes to when to lock in your mortgage rate, but remember you can refinance when rates eventually come down.”

Leading indicators for home purchases:

• In the week ended September 8, 30-year mortgage rates rose to 5.89%, the highest since November 2008.

• Fewer people searched “homes for sale” on Google. Searches for the week ended September 3rd were down 25% year over year.

• The seasonally adjusted Redfin Homebuyer Demand Index — a measure of requests for home inspections and other home-buying services from Redfin agents — rose 18% for the week ended September 4 from the 2022 low in June, but declined 11% year-on-year.

• Touring activity on Sept. 4 was down 38% year-to-date, compared to a 3% increase at the same time last year, according to home tour tech company ShowingTime.

• Applications for mortgage purchases were down a seasonally adjusted 1% week-on-week and were down 23% year-on-year in the week ended September 2nd.

Major housing takeaways for over 400 U.S. metropolitan areas:

Unless otherwise stated, this includes data the four-week period ending August 28. Redfin’s weekly housing market data dates back to 2015.

• The median home selling price was $369,748, up 6% year over year.

• Home selling prices in San Francisco fell 7% year over year, the sharpest drop since July 2022. San Francisco and neighboring Oakland, California, where prices fell 1.4%, were the only two metro areas to report a year-on-year decline mid-sale recorded price falls.

• The median asking price for newly listed homes increased 8% year over year to $377,000.

• The monthly mortgage payment on the average asking price for a home was $2,337 at a current mortgage rate of 5.89%, up 40% from $1,664 a year ago when mortgage rates were 2.88%. That’s down from the high of $2,461 set in the four weeks ended June 19.

• Pending home sales fell 19% year over year, the biggest drop since May 2020.

• New listings of homes for sale fell 18% year over year, also the biggest drop since May 2020.

• Active listings (the number of properties for sale at any point during the period) declined 1.2% compared to the previous four-week period. Year-on-year, they were up 3%.

• 35% of signed homes had an accepted offer within the first two weeks on the market, little changed from the previous four-week period but down from 42% a year earlier.

• 24% of signed homes had an accepted offer within a week of launch, little changed from the previous four-week period, but down from 29% a year earlier.

• Homes sold were on the market for a median of 27 days, up from 22 days last year and a record low of 17 days in May and early June.

• 35% of homes sold above list price, up from 49% last year.

• On average, 7.3% of homes for sale saw prices drop each week.

• The average sale-to-list price ratio, which measures how close homes are to their asking prices, fell to 99.7% from 101.2% a year earlier.

To view the full report including charts, please visit:

https://www.redfin.com/news/housing-market-update-surging-rates-slow-buying-and-selling/

About Redfin

redfin (www.redfin.com) is a technology-driven real estate company. We help people find housing with real estate brokerage, home buying (iBuying), rental, lending, home insurance and home improvement services. We sell houses for more money and charge half the fee. We also operate the country’s leading real estate agent website. Our home buying clients view homes first with on-demand tours, and our rental and ownership services help them close quickly. Clients selling a home can accept an instant cash offer from Redfin or have our home renovation team repair their home to sell for a top price. Our rental business enables millions of people across the country to find apartments and homes for rent. Since launching in 2006, we’ve saved our clients more than $1 billion in commissions. We serve more than 100 markets in the US and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, please visit www.redfin.com. To learn more about housing market trends and download data, visit the Redfin data center. To be added to Redfin’s press release mailing list, email [email protected]. To view Redfin’s press center, click here.

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