Is demand in the housing market starting to weaken?

Nearly 50% of homes sold for more than their list price during the four weeks ending May 16, but there are signs that housing market demand may be peaking, according to a report. recent. study from Redfin.

Pending sales for the seven-day period ending May 16 decreased 10% from the previous four weeks, compared to an 8% increase during the same period in 2019. Mortgage purchase applications also decreased 4% week after week.

“Make no mistake, the housing market is still very hot and will remain active for the rest of the year,” said Daryl Fairweather, Redfin’s chief economist. “But there may be signs that some buyers prefer to spend their money on restaurants, vacations and other things that they have withheld over the past year, rather than on homes now that the threat of the pandemic is dissipating in the United States.”

New listings of homes for sale were down 12% from the same period in 2019, and active listings, the number of homes listed for sale at any time during the period, was down 49% from the same period in 2019 (2019 is being used). as a benchmark since 2020 data is skewed by the pandemic).

This is happening, of course, with prices remaining astronomically high. Home prices were recently reported at a record $ 352,975 and were up 24% year-over-year. Sales prices increased to $ 358,975, also a record. Homes in May are also on the market for an average of just 17 days.

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Mortgage rates also skyrocketed in the last week, jumping six basis points to 3%, a possible detriment to would-be homebuyers who were looking at rates below 3% that the country saw earlier this year and over the months. COVID-19 peak. pandemic.

Regional figures also reflect the huge difference in housing market demand since April 2020.

The number of homes sold in April increased 34% over the previous year, but only 8% over the same period in 2019. The only metropolitan area that experienced a drop in home sales was Rochester, New York (-3% ). The biggest gains in sales came in places that saw the steepest slowdown in home sales in April 2020, including San Francisco (up 184%), San Jose (up 150%) and Miami (up 120%). % more).

Median home prices increased from a year earlier in the 85 largest metropolitan areas on Redfin’s thoroughfares. The smallest increase was recorded in Honolulu, Hawaii, where prices were up 0.2% from a year earlier. The largest increases in home prices were recorded in Austin (up 42%), Oxnard, California (up 26%) and Miami (up 26%).

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