Home prices continued to rise in June even as softer demand dampened sales and kept homes on the market for longer.
The median home sales price hit $399,633 for the four weeks ending July 6, according to Redfin, setting a new record. The prices are up 1% from the same time last year.
But signs of buyer fatigue are emerging. Pending sales fell 3.5% year-over-year, according to the report, the biggest drop since February. Homes also took longer to sell, with properties on the market for a median of 37 days, one day longer than a month ago and up five days year-over-year. Fewer homes are going under contract within two weeks or selling above their list price compared to this time last year.
A number of factors may be keeping buyers on the sidelines, including elevated mortgage rates and economic uncertainty. Fannie Mae's Home Purchase Sentiment Index
"It's not location or price-tier specific; the mixed results permeate in every corner of the market," said James Gulden, a Boston-based Redfin Premier agent. "Prices are still as high as they have ever been, but with homes sitting longer, the market is slowly turning in buyers' favor."
Redfin senior economist Asad Khan pointed to tight inventory as a key reason prices remain high.
"Home prices are hitting new records because supply, while improving, is still well below pre-pandemic levels," Khan said in comments referencing an earlier report on high home prices. "Demand has been depressed by high mortgage rates, but serious buyers are competing over a limited number of desirable homes, keeping sale prices elevated."
Despite the slump in pending sales, there's reason for sellers to be optimistic, Redfin said.
While home prices set a record nationwide, they were down in some metros, especially in the South and West. In Oakland, Calif., the median sale price fell 6.2% year-over-year while prices dropped more than 5% in West Palm Beach, Fla. Home prices also fell around 3 to 4% in Austin, Texas, Tampa, Fla., and Atlanta.
This comes as
