The Homebuyer Demand Index from Redfin reached a new all-time high since at least 2017, indicating continued robust housing demand at a season when the market generally slows. The Redfin Homebuyer Demand Index is a seasonally adjusted measure of demand from Redfin agents and Redfin partner agents to whom the company refers business for home tours and other home-buying services. The market is also picking up quickly, with a growing number of homes selling in less than two weeks. The number of homes advertised for sale is dropping at a significantly slower rate than in 2019 and 2020, indicating that demand is increasing. New listings are down 12% from six weeks ago, but this is a smaller reduction than the 18% drop seen in the same period last year.
Redfin Chief Economist Daryl Fairweather stated that the economy is on the mend, and mortgage rates remain around historic lows. He further explained that the combination of these two forces has resulted in a record high in home buyer demand.
He also explained that people who tried to buy a home in the spring are returning for a second chance, only to discover that the market is still tough to navigate due to a scarcity of available homes. He pointed out that many purchasers wish they had bought last year, now that not just homes, but also gas, food, and dining out are more expensive. Because it’s so difficult and expensive to acquire new appliances or locate contractors to make upgrades, many purchasers nowadays are confined to move-in-ready homes.
Takeaways for 400+ U.S. metro cities on the housing market:
Unless otherwise specified, the information in this report pertains to the four weeks ending November 14. The housing market data from Redfin dates back to 2012. Even though most gauges are stabilizing into usual seasonal patterns, comparing today’s market to the pre-pandemic fall market of 2019 illustrates how hot the market remains.
Based on residences that were listed and/or sold within that period:
- The median price of a home sold grew 13% year over year to $357,881. This was up 30% from the same time last year and up 2.1 percent from a month ago. Home prices fell 0.1 percent in 2019 over the same time but gained 0.6 percent in 2020.
- The typical asking price of newly listed properties was $354,725, up 13 percent from the same time last year and up 27 percent from 2019.
- Pending home sales increased by 7% year over year and by 51% when compared to the same period in 2019.
- New listings of properties for sale were down 3% from a year ago, but up 11% from the previous year. New listings have decreased by 12% in the four weeks ending October 3, a lesser drop than in the same period in 2019 (-18%) and 2020 (-18%). (-15 percent ).
- Active listings (the number of residences for sale at any given time throughout the period) decreased by 22% in 2020 and 41% in 2019.
- Within the first two weeks on the market, 45 percent of residences that went under a contract received an accepted offer, up from 40 percent a year ago and 29 percent in 2019. The percentage of residences under contract within two weeks has increased by 1.8 percentage points over the four weeks ended September 19. In the same period of 2019, the share declined by 2.4 percent.
- Within one week of going on the market, 32 percent of homes that went under a contract received an accepted offer, up from 28 percent a year ago and 18 percent in 2019. The number of properties under contract within a week has increased by 2.6 percentage points during the four weeks ended September 12. In the same period of 2019, the share dropped 1.9 points.
- Homes that sold were on the market for a median of 24 days, up from 31 days a year ago and 46 days in 2019. This is more than a week longer than the all-time low of 16 days witnessed in late June and July.
- 44 percent of properties sold for more than the asking price, up from 35% a year ago and 21% in 2019.
- Each week, 4.4 percent of homes for sale saw a price reduction, up 0.9 percentage points from the same time in 2020 and 0.1 percentage points from this time last year.
- Over the last month, the average sale-to-list price ratio, which gauges how close homes sell for their asking prices, has dropped 0.1 points from 100.6 percent to 100.5 percent. To put it another way, the average home sold for 0.5 percent more than it was listed for.
Other measures of home purchase activity include:
- During the week ending November 12, mortgage purchase applications grew by 2% week over week (seasonally adjusted). 30-year mortgage rates fell to 2.98 percent in the week ending November 10th.
- According to home tour technology startup ShowingTime, tour activity has outpaced 2019 by at least 5% through November 14 compared to the first week of January. The Redfin Homebuyer Demand Index increased by 6.7 points in the week ending November 14 to its highest level since the data began in 2017, and was up 23% year over year. The Redfin Homebuyer Demand Index is a seasonally adjusted indicator of demand for home tours and other home-buying services from Redfin agents.