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Dangerously-low inventory levels propelled June’s median sale price to the second-highest level ever, according to a monthly market report published Monday by Redfin.
The majority of inventory indicators dipped to record lows during the month, with the total number of homes for sale declining 15 percent year over year, marking the largest annual decline in two years, according to Redfin’s analysis. New listings precipitously fell 30.6 percent year over year to 450,000, leaving homebuyers battling over 1.8 months of supply.
Despite the lack of inventory, Redfin Chief Economist Daryl Fairweather said homebuyer demand is steadily ticking up and fueling the resurgence of bidding wars — something that pushed the median U.S. home sale price to $426,056 in June — just 1.5 percent away from an all-time high of $432,397 in May 2022.
Daryl Fairweather
“Today’s housing market is extraordinary; it feels hot even though there are very few homes changing hands,” Fairweather said in a written statement. “Sellers are getting multiple offers if their home is priced well and in a desirable area even though there aren’t a lot of buyers out there.”
“That’s because house hunters have so few homes to choose from,” she added. “More buyers are starting to come out of the woodwork as they get used to elevated mortgage rates, which is making the market feel even hotter.”
The report said the fight for housing is most intense in affordable markets, with Rochester, NY (+13.1%); Milwaukee, WI (+11.6%); and Omaha, NE (+10.4%) leading the way in annual median sales price gains. Meanwhile, pandemic boomtowns Boise, ID (-10.4%), Austin, TX (-7.8%) and Las Vegas (-7.8%)– experienced the most significant annual sales price declines.
Kimberly Hogue
Rochester-based Redfin agent Kimberly Hogue said high mortgage rates haven’t deterred homebuyers since they can find great listings for a relatively affordable price. However, she said buyers must make aggressive offers to edge out the competition.
“We haven’t really felt the effects of high mortgage rates on homebuyer demand in Rochester,” Hogue said in a written statement. “You can still find a nice house in a desirable part of town for $300,000 or less, and a lot of people here can afford the monthly payment for a home in that price range. Of course, those homes tend to sell for tens of thousands of dollars above the asking price.”
“There are plenty of remote workers moving in, and lately, I’ve helped several locals move farther out for more acreage,” she added. “I recently had a rural listing get more than 20 offers. One of the bidders offered to send the sellers on a cruise, but the sellers didn’t bite. Instead, they went with an offer that was $100,000 over the asking price.”
Redfin data proved Hogue’s experience is becoming increasingly common, with 46.8% of home offers written by Redfin agents in June facing competition. Although that’s 5 percentage points below last year and 23.6 percentage points below January 2022’s peak, pending sales data hints the trend could continue throughout the summer.
Although seasonally-adjusted pending sales are still down on an annual basis (-16.2%), they’ve risen for three consecutive months on a monthly basis, with June pending sales ascending 1.9% to the highest level since October 2021.
“Homebuyer demand has bottomed out,” Fairweather said. “High rates are still giving a lot of buyers pause, but the sticker shock is no longer as severe as it was when rates skyrocketed last year. With home prices back near record highs, buyers are also less worried that they’ll buy a house that’ll plunge in value.”
