Housing Market Trending Toward ‘Typical’

In further signs of a slightly cooling market, the share of homes with price drops has now passed the 5% mark, according to a Redfin report. The research team there reports that this is the highest level this metric has reached since 2019. This time of year, the price drop level typically remains flat, however Redfin reports it is climbing.

While something to keep an eye on, economists say the market still very much favors the seller. Home prices are still rising and homes are selling very quickly, just slightly slower than before. Homebuying demand remains strong, however, home sellers can still overprice their homes, and those that go a week or two on the market without any bids are adjusting their asking prices accordingly, said Redfin Chief Economist Daryl Fairweather.

"The housing market is less hectic than it was in early spring, but it's still far from typical. The move to a less imbalanced market is happening slowly," said Redfin Chief Economist Daryl Fairweather. "As we approach the beginning of back-to-school season, home prices typically cool, supply winds down, and homes take longer to sell. All that's happening, just very slowly. I don't think the housing market will return to a fully typical state anytime soon, but we are starting to trend in that direction."

Highlights from Redfin's market report, which covers a four-week period ending August 15:

• The median home-sale price increased 17% year over year to $361,973, a record high.
• Asking prices of newly listed homes were up 10% from the same time a year ago to a median of $353,347, the lowest level since mid-April. This is down 2.2% from the all-time high set during the four-week period ending June 27.
• Pending home sales were up 10% year over year, the smallest increase since the four-week period ending June 28, 2020. Pending sales were down 7% from their 2021 peak during the four-week period ending May 30.
• New listings of homes for sale were up 3% from a year earlier. The number of homes being listed is in a typical seasonal decline, down 7% from the 2021 peak during the four-week period ending June 27, compared to a 13% decline over the same period in 2019.
• Active listings (the number of homes listed for sale at any point during the period) fell 24% from 2020—the smallest decline since the four-week period ending October 25, 2020—and have climbed 15% since their 2021 low during the four week period ending March 7.
• Homes that sold were on the market for a median of 18 days, up from the all-time low of 15 days that had held for four weeks in late June and July, and down from 35 days a year earlier.
• The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101.8%. In other words, the average home sold for 1.8% above its asking price. This measure is down 0.5 percentage points from its peak during the four-week period ending July 11, and up 2.7 percentage points from a year earlier.
• From January 1 to August 15, home tours went up 14%, compared to a 43% increase over the same period last year according to home tour technology company ShowingTime.

The full report is available at Redfin.com.