Pending home sales in August rose just 9%, the slowest growth since June 2020, according to a new Redfin report.
And as sales are growing at a slower rate, homesellers nationwide are starting to drop their prices — a sign of demand softening. Despite those drops, however, home prices are still up 15% from last year. The report also found the actual number of pending sales was at its lowest level since April.
Redfin Chief Economist Daryl Fairweather said in a release that today’s housing market is becoming slightly more favorable to buyers, something that hasn’t been seen in quite some time.
“Homes are taking longer to sell, which gives buyers more time to make thoughtful decisions about whether to make offers,” Fairweather said in the release. “Home prices have plateaued, so buyers shouldn’t feel rushed to buy before prices rise further. And the fact that more sellers are dropping their list price is a sign that sellers have to be realistic about their price expectations.”
For the four weeks ended Aug. 29, the median home price rose 15% year over year to $359,983, while asking prices of newly listed homes were up 10% from a year ago, at a median of $354,665, the lowest level since late April and down 1.8% from the end of June’s all-time high.
New listings fell 10% in August from their June 27 peak. Active listings also dropped, down 22% from 2020 but up 17% from the 2021 low set during the four weeks ended March 7.
Nearly 50% of the homes that went under contract in August had an offer within the first two weeks, four percentage points higher than the rate last year, but down 8% from the 2021 peak. Homes under contract within one week hit 35%, up from 32% a year earlier.
Homes were on the market for a median of 18 days before selling, up from the all-time low of 15 days in late June and July and down from 33 days in 2020.
Homes were still selling well above list price in August (51%), up from last year’s 32% of homes. The average home sold for 1.5% above asking price.
During the week ended Aug. 27, there was a 1% week-over-week increase in mortgage applications, according to the report.