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Pending Home Sales Drop to Historic Low

As the number of homes for sale fell to a record low, the median home sale price rose 14.6% year-over-year. A new all-time high of $361,171 was totaled during the four-week period ending December 26, according to a new report from Redfin.

New listings and pending sales both dropped to their lowest levels since January 2021, and touring activity was down compared with comparable periods in 2019 and 2020.

"The holiday effect of homebuyers and sellers diverting their time and attention toward travel and celebrations was even more extreme than during the pre-pandemic Christmas week of 2019," said Redfin Deputy Chief Economist Taylor Marr.

Some 400+ U.S. metro areas surveyed in various housing markets reflected percentage increases. The median asking price of newly listed homes increased 12.9% Y-o-Y to $345,348, up 28.7% from 2019. Pending home sales were up 4.2% year over year and up 55.2% compared to the same period in 2019. New listings of homes for sale were down 6.4% from a year earlier but up 15.6% from 2019.

Active listings fell 26.1% to an all-time low and were down 44.8% from 2019. The share of homes that went under contract that had an accepted offer within the first two weeks on the market was 40.3%, above the 35% rate of last year.

Some 29.6% of homes that went under contract had an accepted offer within one week of being listed, up from 25.3% during the same period. Homes that sold were on the market for a median of 26 days.

On average, 42.1% of homes sold above list price, up from 33.6% a year earlier, whereas 2.8% of homes for sale each week had a price drop, up 0.5 percentage points from the same time in 2020. Aside from a slight decline in percentage, the average sale-to-list price ratio was 100.4%. This resulted in homes being sold for 0.4% above asking price. The Redfin Homebuyer Demand Index was also up 17% from a year earlier.

Other leading indicators of homebuying activity included mortgage purchase applications decreasing 3% week-over-week for the period ending December 23.

"We see this slowdown as a temporary consequence of the holidays, and not as an indication that homebuyer demand is backing off. Those who did purchase homes over the holidays paid high prices due to the ongoing supply shortage,” Marr said.

For the week ending December 23, 30-year mortgage rates declined to 3.05%. Touring activity through December 26 was 8.7 percentage points behind 2019 and 8.5 points behind 2020 relative to the first week of January, according to home tour technology company ShowingTime.

To view the full report, including charts and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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