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Demand Dampens, Market Shows More Signs of Cooling

The number of homes for sale nationwide in June rose 2%, the first annual increase since July 2019 —according to a new report from Redfin.

Supply has built up as the combination of 5.5%-plus mortgage rates, high home prices and a faltering economy push more buyers to the sidelines, thereby creating a more balanced market.

Home sales fell nearly 16% from a year ago, the largest decline since May 2020. The shift has also started impacting sale prices: They’re still growing by double digits, but the 11% year-over-year increase is the smallest in nearly two years.

"The country's economic woes have already cooled the housing market, and they're likely to continue dampening demand," said Redfin Chief Economist Daryl Fairweather. "The Fed has signaled it may increase interest rates further to combat stubbornly high inflation, which could harm consumer confidence, and lower stock prices mean fewer prospective homebuyers can afford a down payment. I advise sellers to commit: If you decide to sell, do it quickly before demand falls further. And price carefully—this is not the time to test the waters. You’ll do more harm than good if you overprice and have to do a price reduction or take the home off the market."

The market is a now considered a mixed bag for buyers. They're seeing higher monthly housing payments than earlier this year due to comparatively high mortgage rates but facing less competition for homes, which often allows them to make less risky offers that include protections like inspection and appraisal contingencies.

Metro-Level Highlights:

Competition

  • Denver and Indianapolis were the fastest markets, with half of all homes pending sale in just 5 days. Grand Rapids, Michigan, Omaha, Nebraska, and Oklahoma City were the next-fastest markets —with 6 median days on market.
  • The most competitive market in June was Rochester, New York, where 80.5% of homes sold above list price, followed by 76.8% in Worcester, Massachusetts, 76.2% in Oakland, California, 75.4% in Buffalo, New York, and 75.0% in Hartford, Connecticut.

Prices

  • North Port, Florida had the nation’s highest price growth, with home prices rising 29.7% since a year earlier to $480,000. Cape Coral, Florida had the second-highest growth at 27.7%, followed by Tampa, Florida (26.1%), Fort Worth, Texas (24.2%), and Knoxville, Tennessee (24.1%).
  • Only San Francisco (-0.5%) saw price declines in June.

Sales

  • No metro areas saw home sales increase from a year earlier in June. Greenville, South Carolina had the smallest decline, with home sales dropping 2.3% year over year, followed by Worcester, Massachusetts, down 4.1%. El Paso, Texas rounded out the top three with sales down 7.2% from a year ago.
  • West Palm Beach, Florida saw the largest decline in sales from a year earlier, falling 34.1%. Next came Anaheim, California and Miami, where home sales declined by 33.6% and 33.5%, respectively.

Inventory

  • North Port, Florida had the biggest increase in the number of homes for sale, up 34% year over year, followed by Colorado Springs, Colorado (31.5%) and Austin, Texas (26.9%).
  • Allentown, Pennsylvania had the largest decrease in the number of homes for sale, falling 41.1% since last June. Hartford, Connecticut (-29.2%), Greensboro, North Carolina (-28.6%), and Bridgeport, Connecticut (-27.9%) came next.

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, with more than six years of writing experience. She has served as 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, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at [email protected]
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