Housing Market Update: Pending Sales Continue to Slow—Still Up 29% from 2020

Housing Market Update: Pending Sales Continue to Slow—Still Up 29% from 2020

by and
Updated on October 26th, 2022

Other leading indicators such as home tours and mortgage purchase applications have also slowed.

As we head into June, the breakneck pace of the housing market is beginning to slow. Leading indicators of activity are now mostly cooling off instead of continuing to heat up. Adjusted for seasonality, home purchase applications have been falling since late March and are now 7% below the average levels in January and February 2020, before the pandemic began to impact the market, despite low mortgage rates and easing access to credit. The cooling market is also reflected in a four-week decline in pending sales and a drop in Redfin’s demand index, which is down 12% from its late March peak. Taken as a whole, the data paints a picture not of a bursting bubble, but a clear change from the overheated spring market.

Leading Indicators of Housing Market Demand

“Homebuyers may have found a better way to spend Memorial Day weekend than touring homes, but most have not exited the market entirely,” said Redfin Lead Economist Taylor Marr. “Buyers have faced a tough market this year and fewer feel it is a good time to buy as the allure of low rates has waned, so some are choosing to wait it out for now. With demand stabilizing, the housing market should become more balanced, allowing homebuyers to have a less stressful and challenging time finding and competing for a home.”

“While the market has not come to a full stop, we are seeing signs of yielding,” said Westchester County, NY Redfin real estate agent Candice Smith. “Buyers are winning bidding wars with offers that are $60,000 or less over asking prices; just a month ago in similar situations they had to go $100,000 or more over asking. Bidding wars are still the norm, but the number of competing offers have been cut in half from around 17 to about eight. Homebuyers still need to be strategically creative when submitting their highest and best offer, which involves methods like offering to cover an appraisal gap upfront, dropping the appraisal or mortgage contingency altogether or adding escalation clauses.”

Key housing market takeaways for 400+ U.S. metro areas:

Unless otherwise noted, this data covers the four-week period ending June 6. Redfin’s housing market data goes back through 2012.

Data based on homes listed and/or sold during the period:

  • The median home-sale price increased 24% year over year to $358,749, a record high.
  • Asking prices of newly listed homes hit a new all-time high of $364,725, up 14% from the same time a year ago.
  • Pending home sales were up 29% year over year. Seasonally adjusted pending sales are down 9.7% from their peak four weeks ago. The sudden slowdown in pending sales is likely due to more people opting to pause their home search and take advantage of the holiday weekend.
  • New listings of homes for sale were up 9% from a year earlier.
  • Active listings (the number of homes listed for sale at any point during the period) fell 37% from 2020, and have been relatively flat since late February.
  • 56% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 43% rate during the same period a year ago.
  • 43% of homes that went under contract had an accepted offer within one week of hitting the market, up from 31% during the same period a year earlier.
  • Homes that sold were on the market for a median of 16 days, a new all-time low and down from 38 days a year earlier.
  • A record 53% of homes sold above list price, up from 25% a year earlier.
  • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased to 102.1%—3.7 percentage points higher than a year earlier and an all-time high.

Other other leading indicators of homebuying activity:

Refer to our metrics definition page for explanations of all the metrics used in this report.

Home Sale Prices Up 24% From 2020

Asking Prices on New Listings Up 14% From 2020

Pending Sales Up 29% From 2020, Up 20% From 2019

New Listings of Homes Up 9% From 2020, Down 7% From 2019

Active Listings of Homes For Sale Down 37% From 2020

56% of Pending Sales Under Contract Within Two Weeks

43% of Pending Sales Under Contract Within One Week

Days on Market Fell to a Record Low of 16 Days

Over Half of Homes Sold Above List Price

Sale-to-List Price Ratio Passes 102%

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Tim Ellis

Tim Ellis has been analyzing the real estate market since 2005, and worked at Redfin as a housing market analyst from 2010 through 2013 and again starting in 2018. In his free time, he runs the independently-operated Seattle-area real estate website Seattle Bubble, and produces the "Dispatches from the Multiverse" improvised comedy sci-fi podcast.

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Taylor Marr

Taylor Marr is the deputy chief economist on the research team at Redfin. He is passionate about housing and urban policy and an advocate for increased mobility and affordability. He laid the framework for our migration data and reports and diligently tracks the housing market and economy. Before Redfin, Taylor built financial market index funds for Vanguard at the University of Chicago. Taylor went to graduate school for international economics in Berlin, where he focused on behavioral causes of the global housing bubble and subsequent policy responses. Taylor’s research has been featured in the New York Times, the Wall Street Journal, and The Economist. He was also recently the President of the Seattle Economics Council and collaborates frequently with the Fed, HUD, and the Census Bureau. Follow him on Twitter @tayloramarr or subscribe to his weekly newsletter on Substack here: https://taylormarr.substack.com

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