SEATTLE, WA — The median U.S. home-sale price soared to an all-time high of $397,482 in the four weeks ending July 7, marking a 4.7% increase from the previous year, according to a report from real estate brokerage Redfin. This rise represents the largest year-over-year jump in over four months and marks the ninth consecutive week of record-breaking prices.
Despite high mortgage rates dampening homebuying demand, sale prices have remained elevated. Pending home sales have dropped by 3.5% year over year, and mortgage-purchase applications have fallen 13%. The sustained high prices are partly due to historically low inventory levels, which keep prices high and sales low. Additionally, final sale prices are lagging indicators, reflecting deals made one or two months earlier.
There are emerging signs that price growth may slow. The typical home is selling for 0.4% less than its asking price, which is the first time homes have sold below list price at the start of July since 2020. Furthermore, only 32% of homes are selling above asking price, down from 36% a year ago, marking the lowest share for this time of year since 2020.
Although inventory levels are still historically low, they are increasing on a year-over-year basis, suggesting potential deceleration in price growth. New listings have risen by 7.3% from last year, and the total number of homes for sale has climbed by 18.3%. Over 60% of homes have been listed for at least a month without going under contract, indicating that homes are sitting on the market longer.
“Homes are sitting longer than they usually do this time of year, which has led to some—but not all—homes selling for a little bit less,” said Julie Zubiate, a Redfin Premier agent in the Bay Area. “The longer rates stay high, the pickier buyers are getting. Buyers will jump ship or try to negotiate the price down with any sort of tiny problem; sellers should take the time to prep, price and promote their homes correctly to find the right buyer. That being said, there is one segment of the market that is still moving fast, with homes going over asking price with multiple offers: Move-in ready homes with big backyards located in desirable school districts.”
The increase in listings is partly driven by homeowners growing weary of waiting for mortgage rates to drop. Rates have been at double the pandemic-era lows for nearly two years, prompting sellers to move forward with their plans despite the higher rates.
If the trend of rising inventory and slower price growth continues, the housing market may see a shift towards more balanced conditions in the coming months.
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