Redfin Reports Record-High Monthly Payments Chill Spring Selling Season—But Declining Rates Could Boost Activity

High home prices and rates sent home sellers and buyers to the sidelines in April and the start of May—but last week’s encouraging economic news drove mortgage rates down a bit

SEATTLE–(BUSINESS WIRE)–
(NASDAQ: RDFN) —The median U.S. monthly housing payment hit an all-time high of $2,894 during the four weeks ending May 5, up 14% from a year earlier, and home prices rose 4.5% to their own record high. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

The supply of homes for sale lost momentum, with prospective sellers jittery about high rates. New listings rose 9% year over year, the smallest increase in three months (with the exception of the four weeks ending March 31, when there was an artificially small decline due to Easter). There were fewer new listings during the four-week period ending May 5 than any comparable period on record except 2020 and 2023. Many would-be sellers backed off when rates rose throughout April, opting to stay put to hold onto their low mortgage rate.

Home sales fell due to high rates and low supply. Pending home sales dropped 3% from a year earlier, the biggest decline in two months. There are also signs that competition for homes is slowing during a time of year when it typically speeds up: 30% of homes sold above asking price, flat from a week earlier and down from 32% a year earlier and more than 50% two years earlier. And 6.2% of home sellers dropped their asking price, the highest share since November and up from 4.3% a year ago. But there is one signal that demand is starting to pick up: Mortgage-purchase applications increased 2% week over week.

Recent economic news brought rates down from their peak. Encouraging economic news pushed daily average mortgage rates down from a five-month high of 7.5% on April 30 to about 7.2% at the end of last week and into this week, bringing buyers a modicum of relief. The Fed held interest rates steady and kept open the possibility of a rate cut later this year at their May 1 meeting, and last Friday’s soft jobs report was another step in the right direction.

“The market is a mixed bag, with high mortgage rates causing some listings to sit longer than I would expect in the springtime and high prices holding steady,” said David Palmer, a Redfin Premier agent in Seattle. “Sellers can rest assured that there are plenty of motivated buyers who are jumping into the market now; they finally understand that rates aren’t going to plummet anytime soon. Those buyers are the people who are moving because they need to: They’re relocating for a new job, going through a divorce, or growing their family. So even though some of my listings are taking longer to sell than they would in a typical spring market, they are selling eventually.”

For Redfin economists’ takes on the housing market, including more on how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.

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

7.2% (May 8)

Down from a 5-month high of 7.52% two weeks earlier

Up from 6.5%

Mortgage News Daily

Weekly average 30-year fixed mortgage rate

7.22% (week ending May 2)

Highest level since Nov. 2023

Up from 6.39%

Freddie Mac

Mortgage-purchase applications (seasonally adjusted)

Increased 2% from a week earlier (as of week ending May 3)

Down 17%

Mortgage Bankers Association

Redfin Homebuyer Demand Index (seasonally adjusted)

Down 6% from a month earlier (as of week ending May 5)

Down 12%

Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents

Touring activity

Up 32% from the start of the year (as of May 7)

At this time last year, it was up 27% from the start of 2023

ShowingTime, a home touring technology company

Google searches for “home for sale”

Essentially unchanged from a month earlier (as of May 5)

Down 18%

Google Trends

Key housing-market data

U.S. highlights: Four weeks ending May 5, 2024

Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.

Four weeks ending May 5, 2024

Year-over-year change

Notes

Median sale price

$384,721

4.5%

All-time high

Median asking price

$419,519

6.5%

All-time high

Median monthly mortgage payment

$2,894 at a 7.22% mortgage rate

14.1%

All-time high

Pending sales

90,542

-3%

Tied with the 2 previous 4-week periods for the biggest decline in 2 months

New listings

102,449

9.3%

Smallest increase since 4 weeks ending Feb. 11, with the exception of a 6.6% increase during the 4 weeks ending March 31 (that uptick was artificially small because of the Easter holiday)

Active listings

877,829

13.3%

Months of supply

3.2 months

+0.5 pts.

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

44.9%

Down from 47%

Median days on market

34

+1 day

Share of homes sold above list price

30.4%

Down from 32%

Share of homes with a price drop

6.2%

+1.9 pts.

Average sale-to-list price ratio

99.4%

+0.1 pt.

Metro-level highlights: Four weeks ending May 5, 2024

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 decreases

Notes

Median sale price

Anaheim, CA (21%)

West Palm Beach, FL (15.9%)

Detroit (15.7%)

San Jose, CA (13.2%)

New Brunswick, NJ (12.8%)

San Antonio, TX (-1.9%)

Declined in just 1 metro

Pending sales

San Jose, CA (21.9%)

Anaheim, CA (9.1%)

Oakland, CA (6.1%)

San Francisco (6.1%)

Seattle (5.9%)

Phoenix (-13%)

Atlanta (-11.7%)

Houston (-11.1%)

Jacksonville, FL (-10.3%)

Orlando, FL (-10.2%)

Increased in 15 metros

New listings

San Jose, CA (35.6%)

Phoenix (25.9%)

Seattle (22.4%)

San Diego, CA (21.5%)

Oakland, CA (21.1%)

Chicago (-9%)

Newark, NJ (-4.3%)

Warren, MI (-3.9%)

Atlanta (-3%)

Detroit (-2.5%)

Providence, RI (-1.5%)

Declined in 6 metros

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-record-high-monthly-payments-mortgage-rates-decline

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 run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. 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 can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

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 [email protected]. To view Redfin’s press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509967027/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-414-8880

[email protected]

Source: Redfin

Released May 9, 2024

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