Record High Home-Sale Prices for 9th Week: Rising Supply and Slow Demand Hint at Potential Price Slowdown
Anya’s Market Bites:
The U.S. housing market continues to see dynamic changes, with the median home-sale price reaching an all-time high. As of the four weeks ending July 7, the median sale price surged to $397,482, marking a 4.7% year-over-year increase—the largest in over four months. This period also saw the median sale price set a new record high for the ninth consecutive week.
Despite high prices, homebuying demand has been tempered by elevated mortgage rates. Pending home sales have declined by 3.5% year-over-year, while mortgage-purchase applications have dropped by 13%. The persistent high prices are partly due to historically low inventory levels, which drive up prices, and partly because sale prices reflect deals made one to two months earlier.
However, there are indications that price growth may soon slow down. For the first time since 2020, homes are selling for 0.4% less than their asking price at the start of July. Additionally, only 32% of homes are selling above asking price, down from 36% a year ago—the lowest share since 2020.
Although inventory is still low, it is rising year-over-year, suggesting potential price stabilization ahead. New listings have increased by 7.3%, and the total number of homes for sale is up 18.3%. Over 60% of homes have been on the market for at least a month without going under contract, reflecting a trend of listings growing stale. This increase in inventory is partly due to sustained high mortgage rates, leading sellers to move on despite waiting for better rates.
Julie Zubiate, a Redfin Premier agent in the Bay Area, notes that homes are staying on the market longer, leading to some price negotiations. Buyers are becoming pickier, often negotiating prices down over minor issues. Sellers should focus on properly preparing, pricing, and promoting their homes to attract the right buyers. However, move-in ready homes in desirable areas, especially those with big backyards and good school districts, are still selling quickly, often above asking price with multiple offers.
(Source: Redfin)
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