Early-stage homebuying demand continues to falter this spring as new listings fell 7% from a year earlier, the average 30-year fixed mortgage rate shot up to 5% and the median asking price climbed to $397,747, sending the typical homebuyer’s monthly payment up 35% year over year to an all-time high of $2,288. Here are the key early indicators that tell us demand is softening at a time of year it typically springs up:
We’re also closely watching the accelerating share of home listings with price drops, which is climbing at its fastest spring pace since at least 2015, another sign that demand is not meeting sellers’ expectations.
“There really is a limit to homebuyer demand, even though the market over the past few years has made it seem endless,” said Redfin Chief Economist Daryl Fairweather. “The sharp increase in mortgage rates is pushing more homebuyers out of the market, but it also appears to be discouraging some homeowners from selling. With demand and supply both slipping, the market isn’t likely to flip from a seller’s market to a buyer’s market anytime soon.”
Despite these early signs that the market is slowing, it still feels as hot as ever for homebuyers, with new records set for home-selling speeds and price escalations, based on data going back to 2015. Forty-five percent of homes that went under contract found a buyer within one week, and the average home that sold went for 2.4% above its asking price.
“If a home is on the market for more than a week, people start to wonder why or assume something is wrong with it,” said Redfin Boston real estate agent James Gulden. “Every offer I’ve written recently has faced multiple offers, but some people have finally had enough of all the competition and are pulling out. They’re becoming less willing to make a risky offer in a high-stress bidding war situation.”
Unless otherwise noted, the data in this report covers the four-week period ending April 10. Redfin’s housing market data goes back through 2012.
Refer to our metrics definition page for explanations of all the metrics used in this report.
