Home sales after rare drop in May as mortgage rates rise

SEATTLE–(BUSINESS WIRE)–(NASDAQ: RDFN) – Home prices rose 1.5% month-on-month in May, their smallest all-May increase in Redfin records, which date back to 2012, according to a new report from Redfin (redfin.com), the technology-driven real estate brokerage.

The housing market cooled significantly as mortgage rates hit their highest levels since 2009. Seasonally-adjusted home sales fell 3% month-on-month, their only decline in May outside of 2020, when the onset of the pandemic sent shockwaves through the housing market. . Despite this decline in demand, the stock of homes for sale still fell compared to the previous year. While the market remains tight and new listings are also declining, May saw the smallest drop in active listings since November 2019.

“The sudden and dramatic spike in mortgage rates has been a shock to the housing system,” said Redfin chief economist Daryl Fairweather. “With inflation still at 40-year highs, mortgage rates are likely to stay high for some time, so the market will have to adjust to this new reality. The good news is that cheap debt isn’t fueling plus the unsustainable growth in home prices and that existing homeowners are in a good position, holding record home equity with debt financed at record mortgage rates.Homebuyers, however, are facing mortgage rates approaching 6 %, which means the housing market slowdown will likely continue into the fall, but on the bright side, homebuyers are facing less competition for the first time in two years.

May Highlights

Market Summary

May 2022

month after month

Year after year

Median selling price

$430,600

1.5%

14.8%

Homes sold, seasonally adjusted

556,200

-3.0%

-10.2%

Pending sales, seasonally adjusted data

516,500

0.3%

-9.2%

New listings, seasonally adjusted

614,200

0.8%

-4.5%

All Houses for sale, seasonally adjusted

1,372,800

-0.7%

-4.3%

Median days on market

16

-1

0

Months of supply

1.4

0

0.1

Sold above listing

59.3%

0.4 points

5.8 points

Off-market Redfin median estimate

$420,600

1.4%

22.3%

Average list sale

103.1%

0 points

0.9 points

Average 30-year fixed mortgage rate

5.23%

+0.25 points

+2.27 points

†- “pts” = change in percentage points

Metropolitan Highlights

Competition

  • Indianapolis was the fastest market, with half of all homes waiting to sell in just 4 days, the same as a year earlier. Denver, Omaha, NE, Oklahoma City and Portland, OR were the next fastest markets, with 5 median days on market.

  • In San Jose, Calif., 84.5% of homes sold above list price, more than any other metro analyzed by Redfin. This is followed by 83.6% in Oakland, CA, 79.3% in Worcester, MA, 76.3% in San Francisco, and 76.0% in Rochester, NY.

Prices

  • North Port, Florida recorded the highest price growth in the country, rising 30.5% from last year to $475,000. Tampa, FL was next with 28.1%, followed by Las Vegas (26.8%), Knoxville, TN (25.9%) and Orlando, FL (25.8%).

  • No metro recorded a price drop in May.

Sales

  • Honolulu led the nation in year-over-year sales growth, up 5.0%, followed by Denver, up 4.0%. El Paso, TX rounded out the top three, with sales up 3.7%.

  • West Palm Beach, FL saw the biggest drop in sales since last year, down 25.5%. This is followed by Lake County, IL (-22.9%) and Anaheim, CA (-22.4%).

Inventory

  • Elgin, IL saw the largest increase in homes for sale, up 35% year over year, followed by Chicago (18.9%) and Austin, TX (15.6% ).

  • Allentown, Pa., saw the largest decline in total active listings, down 46.3% since last May. It was followed by Greensboro, NC (-35.2%), Bridgeport, CT (-31.6%) and Hartford, CT (-29.3%).

Redfin estimate

  • According to data from Redfin Estimate, Miami (48.4%) had the largest share of homes selling below list price, followed by Baton Rouge, LA (40.6%) and Tulsa, OK (40, 0%).

  • Sacramento, Calif. (90.8%) had the highest share of homes expected to sell at or above list price, followed by Oakland (90.1%) and Worcester (89.6%).

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-market-may-home-sales-decline/

About Redfin

Redfin (www.redfin.com) is a technology-driven real estate company. We help people find a home with brokerage, instant home buying (iBuying), rental, loan, title insurance, and home improvement services. We sell houses for more money and charge half the fees. We also run the #1 real estate brokerage site in the country. Our homebuyer clients see homes first with on-demand viewings, and our loan and title services help them close quickly. Customers selling a home can receive an instant cash offer from Redfin or have our renovation team repair their home to sell for the best price. Our rental business helps millions of people across the country find apartments and houses to rent. Since launching in 2006, we’ve saved our clients over $1 billion in commissions. We serve over 100 markets in the United States and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn more about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release mailing list, email [email protected] To see Redfin’s press center, click here.

About Teresa G. Wilson

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