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The median U.S. home sale price rose for the ninth consecutive week, hitting an all-time high of $397,482 during the four weeks ending July 7. A Redfin report published on Thursday said the upward climb in median sales prices contrasts with weakening homebuyer demand and elevated mortgage rates — two factors that usually lead to softening home price growth.
“Sale prices have remained stubbornly high despite elevated mortgage rates pushing down homebuying demand; pending home sales are down 3.5 percent year over year and mortgage-purchase applications are down 13 percent,” the report read. “That’s partly because inventory remains historically low, pushing up prices and pushing down sales.”
“And it’s partly because final sale prices are a lagging indicator — they reflect deals that were struck between buyers and sellers a month or two earlier,” it added.
The rally in median home price growth may soon end as inventory rises and buyer activity slows amid intensifying economic uncertainty.
New listings rose 7.3 percent year over year during the four weeks ending July 7, bolstering total inventory levels 18.3 percent above last year as homesellers tire of halting their plans for better rates. New listing growth was strongest in the West and Southeast, with San Jose, California (+29.3 percent); Jacksonville, Florida (+21.2 percent); Las Vegas (+21.2 percent); Miami (+19.9 percent) and Phoenix (+16.4 percent) experiencing the biggest gains.
However, homes are selling much slower than the rate the market has become used to over the past several years. A whopping 60 percent of homes on the market sit for at least a month before going under contract — a stark contrast to 2020 and 2021, when homes commonly sold within 24 hours.
Not only are homes selling slower, the report said, but they’re also selling for slightly less. The typical home sold during the four weeks ending July 7 went for 0.4 percent below the asking price. Although that seems like a negligible tilt in buyers’ favors, Redfin said it’s the first time since July 2020 that the typical home has sold below the asking price, hinting that homesellers are beginning to adjust their pricing expectations.
“Homes are sitting longer than they usually do this time of year, which has led to some — but not all — homes selling for a little bit less,” Bay Area Redfin Premier Agent Julie Zubiate said in a written statement. “The longer rates stay high, the pickier buyers are getting. Buyers will jump ship or try to negotiate the price down with any sort of tiny problem; sellers should take the time to prep, price and promote their homes correctly to find the right buyer.”
“That being said, there is one segment of the market that is still moving fast, with homes going over asking price with multiple offers: Move-in ready homes with big backyards located in desirable school districts,” she added.
