Homebuying Competition Drops Near Pandemic-Era Low, Redfin Reports
According to recent data from Redfin, competition for home purchases continues to decline as affordability challenges keep many buyers out of the market.
The number of prospective purchasers to make counteroffers is declining, confirming the softening in the market. Counteroffers accounted for only 44.3% of offers made by Redfin agents in July on a seasonally adjusted basis. This represents a decrease from 63.8% from the same time a year ago. This is also lower than last month’s 50.9% for June 2022. This is the sixth consecutive month where multiple-offer scenarios have fallen.
The percentage of offers countered in July was the second-lowest rate the national real estate brokerage had ever seen during the COVID-19 pandemic. The only month with a smaller share was April 2020, when the virus’s appearance brought the housing market to an abrupt halt.
“There’s not the same sense of urgency,” said Alexis Malin, a Redfin real estate agent in Jacksonville. “House hunters are scheduling tours four days in advance instead of one, and they’re becoming much more selective. If a home doesn’t check all of their boxes, they’re waiting until they find one that does. Six months ago, buyers were taking any house they could get.”
Scales have started to tip in favor of buyers as properties begin to stay on the market for extended periods. Even though there is still a long way to go until a buyer’s market is officially proclaimed, some sellers have begun to lower their prices to spur demand. Price reductions occur on 8% of market listings weekly, which is a record-high number.
Zillow: Buyers Gaining Time, Options as Housing Market Rebalances
As per Zillow’s most recent market analysis, property values decreased marginally from June to July, following two years of unmatched increase.
The market is thus swiftly rebalancing, according to Skylar Olsen, chief economist at Zillow. Competition for homes is dwindling due to purchasers’ purchasing power being lowered by nearly two years of double-digit price rises and increased mortgage rates.
Zillow further reports that the average U.S. home value dropped by 0.1% ($366) month over month in July and is now $357,107. Since recently peaking at 1.9% in April, monthly growth in this statistic has slowed, declining to 1.2% in May and 0.8% in June. Although a slowdown in home price increase at this time of year is expected, this is the first monthly drop since 2012. The mean home value nationwide has increased by 16% over the past year and 44.5% since July 2019.
In 30 of the 50 largest metro areas, home values as assessed by raw ZHVI decreased from June to July.
Next week’s potential market moving reports are:
- Monday, August 29th – No Report
- Tuesday, August 30th – U.S. Home Price Index, Job Openings, Quits
- Wednesday, August 31st – Cleveland and Atlanta Fed Presidents Speak
- Thursday, September 1st – Initial Jobless Claims, Construction Spending
- Friday, September 2nd – Unemployment Rate, Average Hourly Earnings
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.