Home Sales Post A Rare Decline For May As Mortgage Rates Rise

Home costs rose 1.5% month over month in May, their smallest improve of any May in Redfin’s information, which return to 2012, in keeping with a brand new report from Redfin, a technology-powered actual property brokerage.

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The housing market cooled significantly as mortgage charges climbed to their highest ranges since 2009. Seasonally-adjusted residence gross sales fell 3% month over month, their solely May decline on document outdoors of 2020, when the beginning of the pandemic despatched shock waves by way of the housing market.

Despite this decline in demand, the stock of properties on the market nonetheless fell from a yr earlier. As the market stays tight and new listings additionally decline, May noticed the smallest drop in energetic listings since November 2019.

“The sudden and dramatic surge in mortgage rates has been a shock to the system for housing,” stated Redfin chief economist Daryl Fairweather. “With inflation still at 40-year highs, mortgage rates are likely to stay elevated for a while, so the market will have to adjust to this new reality.”

She added, “The good news is that cheap debt is no longer fueling unsustainable home price growth, and existing homeowners are in a good position, holding record high home equity with debt financed at record low mortgage rates. Home buyers, however, are facing mortgage rates near 6%, which means the housing market slowdown will likely continue into the fall. But one silver lining is that home buyers are facing less competition for the first time in two years.”

Competition

• Indianapolis was the quickest market, with half of all properties pending sale in simply 4 days, the identical as a yr earlier. Denver; Omaha, Nebraska; Oklahoma City and Portland, Oregon had been the subsequent quickest markets, with 5 median days on market.
• In San Jose, California, 84.5% of properties bought above record value, greater than every other metro Redfin analyzed. Next got here 83.6% in Oakland; 79.3% in Worcester, Massachusetts; 76.3% in San Francisco; and 76% in Rochester, New York.

Prices

• North Port, Florida had the nation’s highest value progress, rising 30.5% since final yr to $475,000. Tampa got here subsequent at 28.1%, adopted by Las Vegas (26.8%), Knoxville, Tennessee (25.9%), and Orlando, Florida (25.8%).
• No metros noticed value declines in May.

Sales

• Honolulu led the nation in year-over-year gross sales progress, up 5%, adopted by Denver, up 4%. El Paso, Texas rounded out the highest three, with gross sales up 3.7%.
• West Palm Beach, Florida noticed the most important decline in gross sales since final yr, falling 25.5%. Next got here Lake County, Illinois (-22.9%) and Anaheim, California (-22.4%).

Inventory

• Elgin, Illinois had the best improve within the variety of properties on the market, up 35% yr over yr, adopted by Chicago (18.9%) and Austin, Texas (15.6%).
• Allentown, Pennsylvania had the most important lower in total energetic listings, falling 46.3% since final May. It was adopted by Greensboro, North Carolina (-35.2%), Bridgeport, Connecticut (-31.6%) and Hartford (-29.3%).

Redfin Estimate

• Miami (48.4%) had the most important share of properties predicted to promote for under record value, in keeping with Redfin Estimate information, adopted by Baton Rouge, Louisiana (40.6%) and Tulsa, Oklahoma (40.0%).
• Sacramento (90.8%) had the most important share of properties predicted to promote at or above record value, adopted by Oakland (90.1%) and Worcester, Massachusetts (89.6%).