High home prices and rates sent home sellers and buyers to the sidelines in April and the start of May. But last week’s encouraging economic news drove mortgage rates down a bit, which could bring back prospective sellers and house hunters. The median U.S. monthly housing payment hit an all-time high of $2,894 during the four weeks ending May 5, up 14% from a year earlier, and home prices rose 4.5% to their own record high. The supply of homes for sale lost momentum, with prospective sellers jittery about high rates. New listings rose 9% year over year, the smallest increase in three months (with the exception of the four weeks ending March 31, when there was an artificially small decline due to Easter.) There were fewer new listings during the four-week period ending May 5 than any comparable period on record except 2020 and 2023. Many would-be sellers backed …
Low-Income Americans Have Lost the Homebuying Progress They Made During the Pandemic
Roughly 1 in 5 new mortgages went to low-income homebuyers in 2023, down from 23% in 2020. Meanwhile, high-income buyers have gained share because they’re more prepared to weather the storm of high home prices and mortgage rates. Roughly one in five (20.6%) new mortgages issued last year went to low-income Americans, bringing that group’s piece of the homebuying pie back down to where it was in 2018. Low-income earners gained ground at the start of the pandemic, taking out 23.2% of all new mortgages in 2020, but that progress has since been erased because high home prices and elevated mortgage rates have eroded affordability. This is according to a Redfin analysis of Home Mortgage Disclosure Act (HMDA) data covering purchases of primary homes. It does not cover purchases of investment properties or second homes. We categorized home purchasers into four groups according to their household income: Very low, low, …
Housing Market Update: For the First Time in Nearly 2 Years, There’s No Major American Metro Where Home Prices Are Falling
Inventory is below typical April levels, driving home prices up. Continually rising mortgage rates are further eroding affordability–and this week’s Fed meeting confirmed that mortgage rates are likely to hold steady for the foreseeable future. The median home-sale price rose from a year earlier or stayed the same in all 50 of the most populous U.S. metros during the four weeks ending April 28, the first time that has happened since July 2022. Nationwide, the median sale price rose to a near-record $383,188, up 4.8% year over year. Mortgage rates also continued climbing, with the weekly average hitting its highest level in five months. High prices and rates drove the median monthly housing payment to a record $2,890, up 15% year over year. Home-price increases were driven by affluent metros and a pair of more affordable places: Anaheim, CA, where prices rose over 20% year over year, took the top …
Nearly 40% of Renters Think They’ll Never Own a Home, Up From 27% Last Year
Rising home prices and mortgage rates are making it harder to believe in the American dream of homeownership. Lack of affordability is the most commonly cited reason renters don’t believe they’ll ever own a home. Nearly two in five (38%) U.S. renters don’t believe they’ll ever own a home, up from roughly one-quarter (27%) less than a year ago. This is according to a Redfin-commissioned survey of roughly 3,000 U.S. residents conducted by Qualtrics in February 2024. This report focuses on the 1,000 respondents who indicated they are renters. The relevant questions were: “Do you believe that you will ever own your own home in the future?” and “Which of the following are reasons you aren’t likely to purchase a home in the near future?” The 27% comparison is from a Redfin survey conducted in May and June 2023. Lack of affordability is the prevailing reason renters believe they’re unlikely …
Housing Market Update: Monthly Payments Set New Record–and Buyers’ Costs Will Likely Stay High on Inflation News
Daily average mortgage rates reached their highest level in nearly five months following Wednesday’s hotter-than-expected inflation report, which will likely keep mortgage rates elevated for the foreseeable future. The median monthly U.S. housing payment hit an all-time high of $2,747 during the four weeks ending April 7, up 11% from a year earlier. Housing payments are soaring because home prices and mortgage rates are high. The median home-sale price is $378,250, up 4.5% year over year and just about $5,000 shy of the record high hit in June 2022. The average 30-year fixed mortgage rate is 6.82%, below the near-8% rates hit last October but still more than double pandemic-era lows. Prices are staying stubbornly high because there’s enough homebuying demand to prop them up. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–is at its highest level since last July, and a …
Nearly 20% of San Francisco Home Sellers Take a Loss on Their Sale, More Than Four Times the National Share
The share of San Francisco sellers losing money on their home sale is sitting near its highest level in more than a decade, largely because prices have come back down to earth after skyrocketing during the pandemic. Nationwide, the share of sellers losing money is much smaller (4%) because home prices remain near their record high. In San Francisco, the typical seller who’s parting ways with their home for less than they originally paid is losing $155,500. Nationwide, the median loss is roughly $40,000. New England sellers are least likely to lose money, with less than 2% of Providence, RI and Boston sellers taking a loss. Nearly one of five (17.8%) homes that sold in San Francisco during the three months ending February 29 sold at a loss. That’s comparable with the 17.9% share hit during the three months ending January 31, which was the highest in 11 years. That’s …