Redfin says sellers are pulling back as demand softens
High housing costs are continuing to weigh on the housing market, with both buyers and sellers showing signs of caution in mid-June.
New listings of homes for sale fell 1.7% from the previous week during the week ending June 21, reaching their lowest level since February, according to Redfin. The total number of homes for sale also dipped 0.4% week over week. Both figures are seasonally adjusted.
The drop in listings came as buyer demand also softened. Pending home sales slipped 0.1% from the previous week, marking the third straight weekly decline from their May peak. Mortgage-purchase applications also fell for a second consecutive week.
Still, demand has not disappeared. Pending sales were up 4.2% from a year earlier, suggesting buyers are still active, but many remain limited by high prices, elevated mortgage rates, and broader economic uncertainty.
High costs still hurting market
The median home-sale price rose 2.5% year over year to a record $408,814 during the four weeks ending June 21. The weekly average 30-year fixed mortgage rate was 6.47%, while the daily average rate stood at 6.55% as of June 24, according to Mortgage News Daily.
High costs are weighing on both sides of the market. Buyers are facing a median monthly mortgage payment of $2,628 at a 6.47% mortgage rate, while some would-be sellers are staying put because they are locked into lower rates and would also need to buy in the current market.
The median asking price rose 2.6% year over year to $404,396. Redfin also cited wider economic uncertainty, including inflation and developments around Iran peace talks, as another factor making buyers more cautious.
For mortgage professionals, the figures point to a market where purchase demand remains present but fragile. Fewer listings could limit transaction volume, while buyers who are still in the market may have more room to negotiate in many areas.
Redfin said much of the country is now a buyer’s market, with hundreds of thousands more sellers than buyers. Nearly half of home sellers gave concessions to buyers in May, the highest share on record for that month.
“Home inspectors are busy. Buyers are regularly including inspection contingencies in their offers, which is one sign that they have the negotiating power,” said Ben Ambroch, a Redfin Premier agent in Milwaukee. “When sellers have power, buyers often waive the inspection. They’re requesting repairs and money based on the inspection, and sellers often need to give buyers what they ask for in order to close the deal. Of course, some homes are still competitive: The ones that are in the most desirable neighborhoods and in tip-top condition inspire bidding wars.”
Other signs also point to a slower market. Google searches for “homes for sale” were down about 10% from a month earlier and about 10% from a year earlier as of June 20, according to Google Trends. Touring activity was up 19% from the start of the year as of June 22, compared with a 33% increase at the same point last year, according to ShowingTime.
Redfin’s national data showed active listings at 1.49 million during the four weeks ending June 21. Months of supply stood at 3.5, below the four to five months generally considered balanced.
Homes spent a median of 39 days on the market, one day longer than a year earlier. The share of listings with price drops was 19.6%, down from about 21% a year earlier. About 28.5% of homes sold above list price, while the average sale-to-list price ratio was 99.1%.
Differences across metro areas
The national figures also mask sharp differences across major metro areas. Among the 50 most populous U.S. metros, San Francisco posted the largest year-over-year increase in median sale price (11.5%), followed by Detroit (9.7%), West Palm Beach, Florida (9%), Pittsburgh (8.7%), and St. Louis (8.5%).
Median sale prices declined in eight metros. The largest drops were in San Jose, California (-6.2%), Seattle (-4.8%), Portland, Oregon (-2.8%), Dallas (-1.8%), and Orlando, Florida (-1.5%).
Pending sales rose the most in West Palm Beach, Florida (21.5%), San Francisco (17.9%), Austin, Texas (15%), Milwaukee (14.8%), and Boston (11.1%). They declined in five metros, led by Houston (-12.7%) and Seattle (-12%).
New listings increased the most in Philadelphia (16.3%), St. Louis (11.2%), Boston (10.8%), Pittsburgh (10.5%), and Montgomery County, Pennsylvania (9.6%). Meanwhile, the largest declines were in Dallas (-12.7%), Riverside, California (-6.8%), Fort Worth, Texas (-6.7%), Jacksonville, Florida (-6.3%), and Atlanta (-5.4%).
