5 signs homebuyer demand is slowing, according to Redfin
June 10, 2022 2:27 PM
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The housing market surge continues to show signs of weakening, with Redfin recording a double-digit decline in homebuyer demand, compared to a year ago, for the second time in three weeks.
The company’s homebuyer demand index was down 12% on an annual basis for the week of June 5, compared with a 9% decline for the week of May 29 and 12% for the week of May 22. At that time, Redfin said it was the largest fall-off for the demand index since the early days of the pandemic, back in April 2020.
"Sellers are losing control of the housing market as homes that are overpriced or less desirable are increasingly having price reductions and taking longer to sell," Taylor Marr, Redfin's deputy chief economist, said in a press release.
But don't start the 10-count on the latest housing boom just yet.
"Although demand is easing, some homebuyers may jump back into the market when price growth loses steam and interest rates continue to stabilize ," Marr continued. "A strong labor market will continue to be a driving force for the bulk home buying demand this year."
Here are some other signs of potential purchasers losing interest in the market:
The company’s homebuyer demand index was down 12% on an annual basis for the week of June 5, compared with
"Sellers are losing control of the housing market as homes that are overpriced or less desirable are increasingly having price reductions and taking longer to sell," Taylor Marr, Redfin's deputy chief economist, said in a press release.
But don't start the 10-count on the latest housing boom just yet.
"Although demand is easing, some homebuyers may jump back into the market when price growth loses steam and interest rates
Here are some other signs of potential purchasers losing interest in the market:
Potential buyer web traffic and open house attendance is falling
Google searches of "homes for sale" for the week ended June 4 were down 10% from the same period one year prior, according to Redfin.
That pace is similar to the 10% annual drop in searches for the week ended May 28. Both are an improvement compared with the 13% decline for the week of May 21 and 11% for the week of May 14.
Meanwhile, home touring activity was only 0.1% above the start of the year for the June 5 period, according to ShowingTime data cited by Redfin. At this time in 2021, it was 25.1% higher.
That pace is similar to the 10% annual drop in searches for the week ended May 28. Both are an improvement compared with the 13% decline for the week of May 21 and 11% for the week of May 14.
Meanwhile, home touring activity was only 0.1% above the start of the year for the June 5 period, according to ShowingTime data cited by Redfin. At this time in 2021, it was 25.1% higher.
Listings are lingering on the market longer
The percentage of homes selling within one and two weeks of listing has shrunk. For the four-week rolling period ended June 5, 36% of properties listed in the prior seven days were under contract. That compared to 39% for the comparative time frame recorded on May 29 and 40% for the May 22 period.
Slightly over half, 51% of the properties entering contract during the four weeks ended June 5 were on the market for 14 days or less, compared with 54% for May 29 and 55% for May 22.
And, relatively speaking, more homes are on the market. Active listings — measured as the number of homes listed for sale at any point during the period — fell 8% year-over-year, for the four weeks ended June 5, the smallest decline since January 2020, Redfin said.
That compares with a 10% decline for the four weeks ended May 29 and 13% for the May 22 time frame.
Slightly over half, 51% of the properties entering contract during the four weeks ended June 5 were on the market for 14 days or less, compared with 54% for May 29 and 55% for May 22.
And, relatively speaking, more homes are on the market. Active listings — measured as the number of homes listed for sale at any point during the period — fell 8% year-over-year, for the four weeks ended June 5, the smallest decline since January 2020, Redfin said.
That compares with a 10% decline for the four weeks ended May 29 and 13% for the
More sellers are dropping their price
The past four weeks featured the highest share of sellers cutting the price of their home since October 2019, Redfin said, with 21.2% reducing their demands, up from 15.2% a month earlier and 10.3% a year ago.
That compares with 20.1% that dropped their price in the four weeks ended May 29, up from 13.8% in the previous month and 10.1% the prior year.
That’s is not stopping sellers from going high when they put their property on the market. The median asking price of newly listed homes increased 17% year-over-year to $413,950 for the June 5 four-week period. This is up from $412,450 during the four weeks leading up to May 29.
The median home sale price was up 15% year over year to a record $401,372 for the June 5 timeframe.
That compares with 20.1% that dropped their price in the four weeks ended May 29, up from 13.8% in the previous month and 10.1% the prior year.
That’s is not stopping sellers from going high when they put their property on the market. The median asking price of newly listed homes increased 17% year-over-year to $413,950 for the June 5 four-week period. This is up from $412,450 during the four weeks leading up to May 29.
The median home sale price was up 15% year over year to a record $401,372 for the June 5 timeframe.
Luxury home sales are declining
The top end of the market is not immune to slowing demand as mortgage rates rise, although jumbo mortgages are still priced lower than conforming loans.
Sales of luxury homes fell 17.8% year-over-year during the three months ending April 30, the largest drop since the onset of the pandemic, a separate Redfin report said.
By comparison, sales of "non luxury" homes fell 5.4% during that period. Redfin defines luxury properties as those priced within the top 5% most expensive listings in the local market.
The median sale price of luxury homes rose 19.8% year-over-year to $1.15 million during the three months ending April 30 — roughly the same growth rate as other homes in lower price brackets. It's down from the peak of 27.5% recorded last spring, but above pre pandemic levels of less than 10%.
While the supply of luxury homes for sale fell 12.4% year-over-year during the three months ending April 30, new listings increased 1.1%, the first rise since the summer of 2021.
Sales of luxury homes fell 17.8% year-over-year during the three months ending April 30, the largest drop since the onset of the pandemic, a separate Redfin report said.
By comparison, sales of "non luxury" homes fell 5.4% during that period. Redfin defines luxury properties as those priced within the top 5% most expensive listings in the local market.
The median sale price of luxury homes rose 19.8% year-over-year to $1.15 million during the three months ending April 30 — roughly the same growth rate as other homes in lower price brackets. It's down from the peak of 27.5% recorded last spring, but above pre pandemic levels of less than 10%.
While the supply of luxury homes for sale fell 12.4% year-over-year during the three months ending April 30, new listings increased 1.1%, the first rise since the summer of 2021.
