Balance is returning to the real estate market as homebuyers finally start finding some relief, according to a new Redfin report.
Sellers are slashing prices at a record rate, inventories are increasing, competition is declining, and mortgage rates are starting to drop following months of increases, the report found.
In the four weeks ended July 3, a record high number of sellers dropped their asking prices, and homes selling for above asking fell for the first time since June of 2020.
Redfin chief economist Daryl Fairweather said signs are pointing to improving conditions for homebuyers.
“Housing remains expensive, but mortgage rates just posted their biggest weekly drop since 2008, which makes buying a home a bit more affordable,” he said. “One way buyers can take advantage of the shift in the market is seeking concessions from sellers. That could include asking the seller to buy down your mortgage rate, pay for repairs or cover some of your closing costs.”
Redfin found fewer Google searches for “homes for sale” during the week ended July 2, down 2% from a year earlier. Its Homebuyer Demand Index, which measures requests for home tours and other services, fell 15% year over year during the week ended July 3.
Additionally, mortgage applications fell 17% from last year during the week ended July 3, as the 30-year mortgage fell to 5.3% for the week ended July 7, the largest one-week drop since 2008, and down from a 2022 high of 5.81%, while still up from 3.11% at the beginning of the year. With that, the monthly mortgage payment on a median asking-price home fell slightly to $2,342, which was still up 40% from $1,668 a year earlier, when mortgage rates were 2.9%.
In the four weeks ended July 3, active listings fell 2% year over year (the smallest decline since Oct. 2019). The median asking price rose 15% from 2021 to $399,973, but was down 2.1% from the all-time high set during the four weeks ended June 5. Meanwhile, the median sale price increased 3% year over year to $396,000. The report also noted this growth rate is down from March’s 16% peak.
Forty-five percent of homes went under contract with an accepted offer within the first two weeks of being listed, down from 49% last year. Thirty-two percent of homes went under contract with an accepted offer within one week, down from 35% in 2021.s
Homes remained on the market a median of 18 days, flat from 2021 and up slightly from May and early June’s record low of 15 days. Fifty-two percent of homes sold above list price, down from 53% a year earlier.