Home sales fell at their highest rate in nearly a year in August

Some homebuyers felt the chill when mortgage rates hit their highest level in more than two decades and prices continued to rise, but buyer demand and new listings have stabilized after months of declines.

Residential property deals are falling at the highest rate in nearly a year, as higher mortgage rates shock homebuyers.

Nationally, nearly 60,000 home purchase agreements were canceled in August, equivalent to 15.7% of the homes that went under contract that month. This is up from 14.3% the previous year and represents the highest percentage since October 2022, when mortgage rates exceeded 7% in the United States. Firstly Time in two decades.

Average interest an average On a 30-year mortgage it was 7.07% in August. At one point last month, it reached 7.23% — the highest since 2001 — pushing up the typical homebuyer’s monthly payment. Significantly Since last year.

“I’ve seen more homebuyers cancel their deals in the last six months than I’ve seen at any point in my 24 years in real estate. They’re cold,” he said. Jamie Moorea Redfin Premier Real estate agent in Reno, Nevada. “Buyers are shocked when they see their high price on paper along with the additional expenses of maintenance, repairs and closing costs. Many of them would rather hold back, even if it means losing their earnest money. Many sellers are also willing to let buyers walk away because they don’t want to compromise on repair requests.

Scroll to the bottom of this report to find the deal cancellation rate for the 50 most populous U.S. metro areas, along with other local insights.

August 2023 Highlights: United States

Note: Data is subject to revision

Home prices post their largest increase in almost a year

The median US home sale price rose 3% year over year to $420,846 in August, the largest annual increase since October 2022, and was little changed (-0.2%) from the previous month. This was 2.8% below the May 2022 record high of $432,780.

Activity in the housing market is slowing due to rising mortgage rates, but prices remain high because existing buyers are competing for a limited number of homes.

“Home prices are likely to remain high for the foreseeable future,” Redfin’s economics research lead said. Chen Zhao. “The Fed is still doing it More work What to do in its battle against inflation, which means that mortgage interest rates are unlikely to fall any time soon. As long as rates stay high, so will homeowners They hesitate For sale. This shortage of homes for sale will keep prices high because it means buyers are spending on the limited supply of homes.

Home prices also recorded a year-on-year increase in August due to “Al Qaeda effect“From the previous year; in August 2022, prices have recently begun to decline from record highs, contributing to the magnitude of the annual increases we are now seeing.

Buyer demand is below pre-pandemic levels, but it is no longer in free fall

Pending sales were down 0.6% from the previous month in August on a seasonally adjusted basis, and were down 18.1% year over year. Although they are no longer declining as quickly as earlier in 2023, pending sales remain below pre-pandemic levels. They have been hovering under 400,000 since the end of last year, compared with nearly 500,000 just before the pandemic.

Pending sales have stabilized as the initial shock of higher mortgage rates moves into the rearview mirror, but high housing costs are still keeping many buyers on the sidelines.

New listings are rising slightly, but overall housing supply remains at a record low

New listings rose 0.8% from the previous month in August — the second small increase on a seasonally adjusted basis after declines lasting nearly a year — and fell 14.4% year over year.

“New listings have probably bottomed out,” Zhao said. “Most homeowners who feel their hands are tied by high interest rates have already made the decision not to sell. This means that many sellers today are putting their homes on the market because they have to, in some cases due to divorce, family emergencies or… Back to the office Policies.”

However, the total number of homes for sale hit a record low in August, falling 1.1% month-over-month on a seasonally adjusted basis and 20.8% year-over-year, the largest annual decline since June 2021.

Housing supply is at an all-time low due to homeowner sentiment Imprisoned to low mortgage rates; For many, selling their home and buying a new one means a much higher monthly payment.

Metro Highlights: August 2023

The data in the bullet points below came from a list of 91 U.S. metro areas with a population of at least 750,000. Specific metro areas may be excluded from time to time to ensure data accuracy. A complete district-level spreadsheet can be found in the Download tab of the dashboard embedded below or In the monthly section of Redfin Data Center. Refer to our Standards definition page For clarifications of the metrics used in this report. Metro-level data are not seasonally adjusted.

• Pending sales: in Boyes, ID, pending sales fell 70.5% year over year, more than any other metros analyzed by Redfin. Next came Hartford, CT (-57.3%) f New Haven, CT (-55.8%). Only two metros saw increases: Rochester, New York (0.9%) and McAllen, Texas (0.5%). It was the smallest decrease in Detroit (-1.8%).
• Closed sales: in Bridgeport, CTForeclosed home sales fell 25.9% year over year, more than any other metro area analyzed by Redfin. Next came Stockton, California (-25.8%) and Tacoma, Washington (-25.7%). Closed sales rose in only one metro —Las vigas (1.4%) – and the lowest North Port, Florida (-0.1%) and Phoenix (-2.9%).
• the prices: Average selling prices rose more than the previous year in Newark, New Jersey (16.7%), Miami (14.6%) and Rochester (14.3%). They fell 15 metres, the steepest drop at Austin, Texas (-7%), Boise (-5.8%) and Fort Worth, Texas (-2.7%).
• Lists: New listings decreased more than the previous year in Hartford (-46.7%), Allentown, Pennsylvania (-46.6%) and New Haven (-38.8%). They rose in five metro areas, with the largest increases in North Port (6%), McAllen (2.4%) and Albany, New York (2.2%).
• Supply: Active real estate listings declined more than the previous year in Boise (-45.5%), Allentown (-45.4%), and Bridgeport (-45.1%). They climbed six subway lines, and the biggest jumps were the ones I made New Orleans (28.8%), McAllen (25.9%), Northport (13.7%).
• a race: In Rochester, 77.1% of homes sold for above the final list price, the highest share among the major cities Redfin analyzed. Next came Hartford (71.9%) and Buffalo, New York (69.6%). The lowest shares were in North Port (7.7%). Cape Coral, Florida (10.6%) and West Palm Beach, Florida (13%).
• Speed: It was the fastest market Grand Rapids, Michigan, where the model home was contracted in seven days. Next came cincinnati (8) And Seattle (8). The slowest markets were New Orleans (61), Honolulu (60) and West Palm Beach (60).

Cancel your home purchase

The data below came from a list of the 50 most populous metropolitan areas. Please note that homes that expire under contract during a particular month are not necessarily under contract in the same month. For example, a home that went under contract in August could have gone under contract in July.