Signs point to home prices leveling off for first time in months
According to several key indicators: the market appears to be plateauing, after five consecutive months of record home prices
More signs are surfacing that the home market is on track for a late-summer cooldown, conditions that largely eluded homebuyers in the late summer of 2020 and beyond.
Seattle-based brokerage Redfin reports the median home sale price has dipped slightly in the past four weeks, the first time since early March that prices failed to rise to a new record level.
Redfin’s analysis of MLS data shows that prices increased 18 percent year over year in July amid an abnormally high demand for homes. And even though inventory appeared to be on the rise in recent weeks, it remained well below normal levels.
These developments — as well as the low mortgage rates accompanying them — have started to offer a bit of breathing room for buyers.
“Although homes are much pricier than they were before the pandemic, homebuyers now have the benefit of very low mortgage rates and a little less competition than they faced earlier in the summer,” Redfin Chief Economist Daryl Fairweather said in the report.
The median price of a home in Redfin’s database was $362,750 in the four-week period ending Aug. 1. This was down 0.2 percent from the four-week period that ended July 25, suggesting the routine price hikes buyers have been accustomed to may have begun to stall.
There were other hints that a seasonal cool down could be underway.
The share of homes that sold above list price appears to have leveled off. It’s stayed between 54 percent and 55 percent since the four-week period ending June 27.
The number of active listings were down 26 percent year over year, a sign of the inventory shortage that has yet to abate. But that gap itself is the smallest recorded since December, Redfin’s analysis shows. Active listings are now up 13 percent from their lows in February and March.
Homes that end up selling have come off the market quickly, with more than half selling in 16 days or less. But this was no faster than they had already been selling in recent weeks.
Fairweather said a buyer recently put in a successful offer on her first home in Myrtle Beach, South Carolina. Before this success story, the buyer had found herself on the losing end of five bidding wars.
“I am hopeful that more opportunities like this will arise in the coming weeks if things continue to stabilize,” Fairweather said in the report.