Home sale prices likely have room to grow as ultra-low mortgage rates lure more buyers to the market.
Early homebuyer demand reached the highest point in at least three years during the week ending September 19, according to Redfin’s Homebuyer Demand Index, which measures requests for home tours and other home-buying services from Redfin agents, adjusted for seasonality. Mortgage purchase applications also increased 2%, on top of an 8% increase the prior week.
During the four-week period ending September 19, most other housing market measures showed a typical late-summer seasonal decline with pending sales down 12% from their 2021 peak, the share of homes sold above list price falling below 50%, and time on market inching up to 20 days. Asking prices, which often increase in September, were up 2.4% from the four-week period ending September 5.
“The fact that homebuyer demand is setting new records as summer draws to a close leads me to believe that home prices have room to grow,” said Redfin Chief Economist Daryl Fairweather. “This fall will be a litmus test for how hot the 2022 housing market will get. And it looks like we are heading into another unseasonably hot fall as ultra-low mortgage rates and employers’ remote-work policies mean Americans are still on the move.”
Key housing market takeaways for 400+ U.S. metro areas:
Unless otherwise noted, the data in this report covers the four-week period ending September 19. Redfin’s housing market data goes back through 2012. Except where indicated otherwise, the housing market is generally experiencing seasonal cooling trends, similar to what was seen during this same period in 2019.
Data based on homes listed and/or sold during the period:
- The median home-sale price increased 13% year over year to $356,663. This was essentially flat from the four-week period ending September 12.
- Asking prices of newly listed homes were up 11% from the same time a year ago to a median of $359,724, an all-time high.
- Pending home sales were up 6% year over year.
- New listings of homes for sale were down 6% from a year earlier. New listings have been below 2020 levels since the four-week period ending August 22.
- Active listings (the number of homes listed for sale at any point during the period) fell 21% from 2020.
- 46% of homes that went under contract had an accepted offer within the first two weeks on the market, above the 43% rate of a year earlier.
- 33% of homes that went under contract had an accepted offer within one week of hitting the market, up from 31% during the same period a year earlier.
- Homes that sold were on the market for a median of 20 days, up from the all-time low of 15 days seen in late June and July, and down from 32 days a year earlier.
- 49% of homes sold above list price, up from 34% a year earlier.
- On average, 4.9% of homes for sale each week had a price drop, up 0.8 percentage points from the same time in 2020, and the highest level since the four-week period ending October 13, 2019.
- The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101.2%. In other words, the average home sold for 1.2% above its asking price.
Other leading indicators of homebuying activity:
- Mortgage purchase applications increased 2% week over week (seasonally adjusted) during the week ending September 17. For the week ending September 16, 30-year mortgage rates were down slightly at 2.86%.
- From January 1 to September 19, home tours were up 11%, compared to a 33% increase over the same period last year, according to home tour technology company ShowingTime.
- The Redfin Homebuyer Demand Index hit a 3-year high during the week ending September 19, up 23% from a year earlier. The seasonally adjusted Redfin Homebuyer Demand Index is a measure of requests for home tours and other home-buying services from Redfin agents.
Refer to our metrics definition page for explanations of all the metrics used in this report.
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