Home Prices Reach Record as Listings Fall to All-Time Low, Redfin Says
U.S. home prices rose to a record high as active listings of homes for sale declined to an all-time low, according to a Redfin report.
The median sale price for a home rose to $360,250 for the four-week period ending Dec. 5, a gain of 14% from a year earlier, the report said. The record low in active listings is down 25% from the same period a year ago.
While the number of homes being sold during the pandemic surged as low mortgage rates boosted demand, there are indications that demand is slowing to reflect a more typical winter real estate season, the report said. Pending home sales, meaning signed contracts, declined to their lowest level since February, according to the report, said Redfin.
The Federal Reserve is tapering its purchases of Treasuries and mortgage bonds, causing mortgage rates to drift higher and dampening home price growth. During the period covered by the report, asking prices for newly listed homes increased 11% from the same time a year ago, a smaller advance than the increase in sale prices, according to the report.
“Homebuying demand seems to be returning to a slowdown trend that we'd typically expect to see in the last few weeks of the year,” said Daryl Fairweather, chief economist for Redfin.
“The latest research on the Omicron variant seems to be easing consumers' worst fears, but a lot of uncertainty remains in the economy – from inflation, jobs and wages to how the Fed reacts to those factors," Fairweather said. "Amid all that economic uncertainty, the notion that home prices will continue to grow in the near-term feels relatively certain.”
New listings of homes for sale were down 7% from a year earlier, the report said.
About 43% of homes sold above list price, an increase from 35% from a year earlier and 21% in 2019, Redfin said.
The average U.S. rate for a 30-year fixed mortgage was 3.07% in November and October, up from 2.74% at the beginning of the year, according to Freddie Mac data.
Measured as an annual average, the rate next year likely will be 3.3%, up from 3% this year, an all-time low, Fannie Mae said in a forecast last month.
Ellen Chang is a Houston-based freelance journalist who writes articles for U.S. News & World Report. Chang previously covered investing, retirement and personal finance for TheStreet. She focuses her articles on stocks, personal finance, energy and cybersecurity. Her byline has appeared in national business publications, including USA Today, CBS News, Yahoo Finance MSN Money, Bankrate, Kiplinger and Fox Business. Follow her on Twitter at @ellenychang and Instagram at @ellenyinchang.