Redfin Report: Prices Go Up While Demand Goes Down

September 07, 2023 at 08:00 AM EDT

Mortgage-purchase applications are sitting at their lowest level in nearly three decades. But there are so few homes for sale that prices are up 4.5% annually, the biggest increase in nearly a year.

(NASDAQ: RDFN) — Although mortgage rates are inching down from their recent peak, housing affordability isn’t improving much, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. With the median U.S. home-sale price up 4.5% year over year during the four weeks ending September 3 and mortgage rates remaining above 7%, the typical monthly mortgage payment is $2,612, just $18 shy of the all-time high set in May. High housing costs are dampening homebuying demand, with mortgage-purchase applications falling to a 28-year low.

Prices are rising due to a supply shortage: The total number of homes on the market is down 18% year over year, the biggest decline since February 2022. New listings are down 9% as many homeowners refuse to part with relatively low mortgage rates. But there are still more buyers than sellers in much of the country.

“The market is marching on, especially for turnkey homes,” said Chicago Redfin Premier agent Niko Voutsinas. “If folks can figure out a way to buy instead of rent, they will. Some buyers are cutting back on other expenses to up their housing budgets because they believe home prices are only going to increase. They’re nervous that the minute rates come down, a flood of competition will edge them out. Those buyers typically need to move quickly and offer at or above the asking price if they love a home, because so few listings are hitting the market.”

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	7.33% (Sept. 6)	Down from a peak of 7.49% two weeks earlier	Up from 6.12%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	7.18% (week ending August 31)	Down slightly from 7.23% a week earlier	Up from 5.66%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 2% from a month earlier	Down 28%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Down 3% from a month earlier (as of the 4 weeks ending Sept. 3)	Down 6%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Down 11% from a month earlier (as of Sept. 5)	Down 16%	Google Trends
Home touring activity		Down 16% from the start of the year, same as last year’s decline (as of Sept. 4)		ShowingTime, a home-touring tech company

Key housing-market data

U.S. highlights: Four weeks ending September 3, 2023 Redfin’s national metrics include data from 400+ U.S. metro areas, and are based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending September 3	Year-over-year change	Notes
Median sale price	$378,725	4.5%	Biggest increase since October 2022
Median asking price	$379,747	3.7%	Biggest increase since November 2022
Median monthly mortgage payment	$2,612 at a 7.18% mortgage rate	15%	Just $18 shy of the all-time high
Pending sales	83,271	-13.3%	Continues 15-month streak of double-digit declines
New listings	82,136	-9.3%	Smallest decline in over a year, but that’s partly because new listings fell rapidly at this time in 2022
Active listings	798,259	-18%	Biggest decline since February 2022
Months of supply	2.8 months	Unchanged	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	39.3%	+0.2 pts.
Median days on market	29	Unchanged
Share of homes sold above list price	33.5%	-0.1 pt.
Share of homes with a price drop	6.1%	+0.1 pt.
Average sale-to-list price ratio	99.6%	Unchanged	Lowest level in over 3 months

Metro-level highlights: Four weeks ending September 3, 2023 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 declines	Notes
Median sale price	Newark, NJ (16.3%) Miami (16.3%) Anaheim, CA (12.8%) San Diego (11.2%) Montgomery County, PA (11.1%)	Austin, TX (-6%) Fort Worth, TX (-2.5%) Phoenix (-2.2%) Portland, OR (-1.1%) San Antonio, TX (-1%)	Declined in just 9 metros
Pending sales	n/a	New Brunswick, NJ (-31.8%) Seattle (-28.5%) Boston (-27.7%) Sacramento (-27.4%) Atlanta (-25.9%)	Declined in all metros
New listings	Milwaukee (3.9%) San Jose, CA (3.6%) Pittsburgh (3.2%)	Atlanta (-30.9%) Las Vegas (-26.4%) Riverside, CA (-21.2%) Cincinnati (-18.8%) Seattle (-18.2%)	Declined in all but 3 metros

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-increase-low-inventory

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 sell homes for more 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 home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

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/20230907354795/en/

Contacts

Redfin Journalist Services:

Kenneth Applewhaite, 206-588-6863

press@redfin.com

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Redfin Report: Prices Go Up While Demand Goes Down

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