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In a sign of just how slow the housing market has been of late, a new report shows that homes are taking longer and longer to sell — with almost half languishing for about two months.
The report, out Wednesday from Redfin, specifically shows that the typical home in August took 37 days to sell. That’s an increase of six days from one year ago. Perhaps even more telling, however, is the report’s finding that 48 percent of houses had been sitting on the market for 60 days or more in August. That number was up from 43.2 percent last year at the same time.
Thus, the report comes to a grim conclusion: “The sluggish summer market continued to drag its heels in August, with home sales dropping to the lowest level since the start of the pandemic.”
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Homes sitting for at least 30 days have also increased from 63.9 percent a year ago to 68.5 percent in August.
These stats appear to be part of larger trends. Redfin’s report states that August was the “fifth straight month in which the share of homes sitting for at least 60 days posted an annual increase.” It was also the sixth consecutive month during which the share of homes sitting for 30 days rose year over year.
The housing market has struggled for nearly three years now, thanks mostly to mortgage rates that shot up at a record pace. The rate increases happened as the Fed attempted to combat inflation in the wake of the COVID-19 pandemic. The higher rates and slower market may ultimately make 2024 the worst year for U.S. home sales since at least 1995.
Many real estate professionals began this year hoping for lower mortgage rates, with the assumption that more affordable loans would get consumers off the sidelines. The Fed finally began cutting the federal funds rate — which influences but does not directly determine mortgage rates — last week. The move was hailed by real estate professionals as a potential turning point, though some analysts have suggested the rate cut may not be a panacea for the housing business.
Redfin’s new report — which is based on listings that have appeared on the company’s website going back to 2012 — raises further questions regarding the impact of rate cuts on real estate.
Sheharyar Bokhari
“We usually see home sales pick up when mortgage rates fall, but this year we are seeing the opposite — sales are dropping and homes are sitting longer on the market,” Redfin Senior Economist Sheharyar Bokhari said in the report. “Last week’s big interest rate cut by the Federal Reserve will give buyers a boost in confidence, but it remains to be seen whether sales will speed up in any meaningful way as we move into the slower fall season.”
The report also found significant regional variation. Homes in Seattle, for instance, experienced a median of 12 days on market in August — the fastest in the U.S., though still a year-over-year increase of four days.
Other cities with fast-selling homes in August included Indianapolis, the Detroit suburb of Warren, and San Jose, California.
On the other hand, homes in West Palm Beach, Florida, were selling the slowest of anywhere in the country, with a median of 79 days on market in August. That’s a jump of 18 days compared to one year ago.
The Sun Belt dominated the list of slow-selling homes, with Fort Lauderdale and Jacksonville, both in Florida, taking the second and third-place spots.
Daryl Fairweather
In the report, Redfin Chief Economist Daryl Fairweather concluded that desirable homes still sell quickly, as has been the case since 2022’s rate increases.
“Now if a home is still on the market after a few weeks, buyers assume there’s something wrong with it,” Fairweather said. “That’s why it’s so important to price your home to move quickly. Buyers see the days on market and when it starts to tick up, it’s like a scarlet letter.”
