Rising mortgage rates, high home prices and a lack of listings continue to hamper U.S. home sales, redfin tuna Sales in May 2024 fell to one of the lowest levels in the past decade, it reported on Friday.
On a seasonally adjusted annual basis, home sales fell below 408,000 units last month. It dropped 1.7% month-on-month and 2.9% year-on-year.
There have been only two months in the past decade where home sales were at a lower level than the previous month, according to data from Nationwide Realtors. The first occurred in May 2020, when lockdowns imposed during the COVID-19 pandemic halted in-person screenings and sales. The second occurred in October 2023, when mortgage rates reached their highest point since 2000.
The data continues to reflect favorable market conditions for sellers, with the median sales price reaching a record high of $439,716, an increase of 5.1% year over year. This is due to a lack of supply, with May listings still about 25% below pre-pandemic levels, Redfin reported.
“While few homes are changing hands, today’s buyers are still facing many realities of a hot market,” Redfin senior economist Elijah de la Campa said in the report. “The sales slump is due to the high cost of buying a home. Investors and would-be sellers are nervous. With so few homes for sale, buyers are engaging in bidding wars in some markets, helping to push home prices to record highs.
However, one factor working in favor of buyers is that one in five listings (19.2%) in May included a price reduction, according to Redfin. This is up from 13.2% in May 2023 and close to the all-time high of 21.7% in October 2022.
Some metropolitan areas, including Indianapolis, Tampa and Denver, saw price cuts on more than 40% of listings. At the other extreme is Newark, New Jersey. In Lake County, Illinois; and Milwaukee, less than 1 in 6 listings received price reductions.
“Some sellers are lowering their prices because the homes they originally listed for sale were priced too high and ended up sitting on the market,” the report explains. “The price declines are particularly severe in areas where housing supply is growing rapidly, such as Florida and Texas. Common. In these areas, individual home sellers have always faced stiff competition from homebuilders.
Of the 10 U.S. metropolitan areas with the highest price reduction ratios, three are in Florida and three are in Texas.
A separate report released by Redfin on Wednesday noted that the proportion of listed stocks deemed “obsolete” has increased over the past year. Last month, 61.9% of homes listed had been on the market for at least 30 days without a contract, up from 60% a year ago and 50% two years ago.
Additionally, two in five homes (40.1%) listed last month had been on the market for at least 60 days, up from 27.8% in May 2022.
“More homes for sale combined with slowing demand means undesirable listings are piling up, leaving some of them uninterested,” the report said.
In an analysis of 85 U.S. metro areas with populations of more than 750,000, Redfin found that Anaheim, Calif., had the highest median sales price increase in the country at 17.6% in the year ending in May 2024. Next is Cleveland (+15.1%).
