Home sales plummet, price growth slows as mortgage rates soar


The housing market took a turn in April as the inventory crisis showed signs of easing, according to a new report from Redfin. The 9% year-over-year decline in homes for sale was the smallest since March 2020 and the first single-digit decline since the start of the pandemic.

While inventories remained at a record high, they fell at a relatively slow pace as soaring mortgage rates dampened demand from homebuyers. Home sales fell 8% – the biggest drop since June 2020 – allowing white-hot home price growth to cool slightly. The median home sale price rose 16% to $424,000, a slight slowdown from March’s 17% gain.

“When market conditions change, it becomes more difficult for buyers and sellers to agree on prices,” said Redfin deputy chief economist Taylor Marr. “Many sellers are still chasing exorbitant prices for their homes, even as rising mortgage rates have constrained buyers’ budgets. As a result, buyers are pulling back, pushing down home sales and easing the housing shortage. As demand continues to fall, more sellers will likely be forced to lower their prices in order to secure offers. The good news is that this should finally bring more balance to the market.

Median selling prices increased from a year earlier in the 88 largest metro areas of Redfin tracks.

The most significant price increases concerned:

  • Las Vegas, Nevada (+29%)
  • West Palm Beach, Florida (+29%)
  • Fort Worth, TX (+28%)

Home sales fell from a year earlier in 87 of the 88 largest Redfin metropolitan areas.

The biggest decreases concern:

  • West Palm Beach, Florida (-30%)
  • Anaheim, CA (-26%)
  • Bridgeport, Connecticut (-25%)

Some 78 of the 88 largest cities tracked by Redfin saw year-on-year declines in the number of seasonally-adjusted active listings of homes for sale.

The biggest decreases concern:

  • Allentown, Pennsylvania (-50%)
  • Greensboro, North Carolina (-40%)
  • Bridgeport, Connecticut (-35%)

The metropolitan areas with the largest increases were in:

  • Elgin, Illinois (+33%)
  • Chicago (+15%)
  • Detroit (+10%)

New listings also fell from a year ago in 78 of the 88 largest metropolitan areas.

The most significant decreases relate to:

  • Allentown, PA (-58%)
  • Greensboro, North Carolina (-45%)
  • Lake County, IL (-29%)

New registrations increased the most in McAllen, Texas, Oklahoma City and Detroit. Home sales that closed in April spent less time on the market and sold for an even higher price than a year ago.

The typical home that sold in April was under contract in 18 days – six days faster than a year earlier – and the shortest time ever on the market for April. About 59% of homes sold above list price, up 10 percentage points from a year earlier, and the highest level on record in Redfin data.

The average selling price to list price ratio hit a record 103.2% in April, from 101.5% a year earlier, as the average home sold 3.2% above its asking price .

Competition

  • Denver and Indianapolis were the fastest markets, with half of all homes waiting to sell in just four days. This is followed by Omaha, Oklahoma City and Portland, OR each with five days on the market.
  • The most competitive market in April was San Jose, Calif., where 88.5% of homes sold above list price, followed by 87.7% in Oakland, Calif., 78.7% in Denver, 77.8% in San Francisco and 75.6% in Oxnard, California.
  • Prices
  • Las Vegas has seen the highest price growth in the country, rising 29% from last year to $445,000. West Palm Beach, FL saw the second highest growth with price growth of 28.6% year over year, followed by Fort Worth, TX (28.3%), Tampa, FL (27 .6%) and Nashville, TN (26.9%).
  • No metro experienced a price drop in April.

Sales

  • Allentown, Pennsylvania led the nation in year-over-year sales growth, up 1.2%, followed by Greensboro, North Carolina, up -0.2%. Omaha, NE rounds out the top three with sales up -0.5% from a year ago.
  • West Palm Beach, Fla., saw the biggest drop in sales since last year, down 29.8%. Home sales in Anaheim, CA and Bridgeport, CT were down 25.7% and 24.9%, respectively.

Inventory

  • Elgin, IL saw the largest increase in homes for sale, up 32.6% year over year, followed by Chicago (15.3%) and Detroit (9.9%) .
  • Allentown, Pa., saw the largest decline in total active listings, down 49.9% since last April. Greensboro, NC (-39.9%), Bridgeport, CT (-35.2%) and Fort Lauderdale, FL (-32.4%) also saw far fewer homes available on the market than there is a year.

Redfin estimate

  • According to data from Redfin Estimate, Miami (39.3%) had the largest share of homes selling below list price, followed by Baton Rouge, LA (32.5%) and Tulsa, OK (29, 7%).
  • Oakland, Calif. (94.8%) had the highest share of homes expected to sell at or above current price, followed by Seattle (94.4%) and San Jose, Calif. (93.5% ).

To view the full report, including charts and methodology, click here.

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