Housing Market Update: Is Relief From The Red-Hot Market On Its Way?

Asking prices leveled off as pending sales–which were rising at this time in 2019–posted a 3% monthly decline. Homes still sold for record prices, at record speeds.

The housing market’s temperature may be starting to drop by a degree or two. Both pending sales and asking prices began to decline or flatten in the four weeks ending May 30. It’s too soon to tell if these are early seasonal changes or the start of the post-pandemic cooldown we predicted earlier this year. The period in question includes the beginning of Memorial Day weekend, which this year marked a return to “normal” life. It may also have marked the beginning of a return to a more “normal” housing market. We should know more as we continue to track the latest data over the next few weeks.

“The housing market was going 100 miles per hour and now it’s down to 80,” said Redfin Chief Economist Daryl Fairweather. “This is not the bursting of a bubble. Rather, it’s a sign that consumers might rather spend their time and money on other things besides housing now that travel, dining and entertainment are resuming in full force.”

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

Unless otherwise noted, this data covers the four-week period ending May 30.

Note: At this time last year, pandemic stay-at-home orders halted homebuying and selling, which makes year-over-year comparisons unreliable for select housing metrics. As such, we have broken this report into two sections: metrics for which a year-over-year comparison remains most relevant, and metrics for which it makes more sense to compare to the same period in 2019.

Early indicators that the housing market may be starting to soften:

Each of the metrics highlighted in the following list set a new housing record going back at least as far as 2012, when Redfin’s data began.

• Pending home sales fell 3% from the four-week period ending May 2, compared to a 2% increase over the same period in 2019. Compared to 2020, they are up 38%.
• Asking prices fell $2,500 from the four-week period ending May 23 to a median of $354,975, up 11% from the same period in 2020.
• New listings of homes for sale were down 8% from the same period in 2019, and are down 5% from the 2021 high, which was set during the four-week period ending May 2. During the same period in 2019, new listings fell 2%.
• Active listings (the number of homes listed for sale at any point during the period) fell 37% from the same period in 2020.
• For the week ending May 28, Mortgage purchase applications decreased 3% week over week (seasonally adjusted). For the week ending June 3, 30-year mortgage rates rose slightly to 2.99%.

“There are some signs that buyers may be pulling back,” said Seattle Redfin real estate agent Alysan Long. “Homes are staying on the market past the date the sellers had planned to review offers and other homes are being listed without an offer review date, neither of which was happening earlier this spring. We’re increasingly seeing homes only get one offer, and even homes that are still getting multiple offers are receiving fewer offers than they would have a few weeks ago.”

Still, measures of home sales that closed during the four weeks ending May 30 set new records for the housing market heat wave.

Indicators of last month’s history-making housing market:

• A record-high median home sale price of $355,558, up a record 24% year over year.
• A record high of 52% of homes sold for more than their list price, up from 26% the same period a year earlier.
• A record-high 102.0% average sale-to-list price ratio, which measures how close homes are selling to their asking prices. This means that the average home sold for 2.0% more than its asking price. A year ago, it sold for 1.5% below asking.
• A record low of 16 days on market for homes that sold during the period, down from 37 days from the same period in 2020.

The share of homes sold in one or two weeks were both just shy of their record high and have been relatively flat since the four-week period ending March 28.

• 56.8% of homes that went under contract had an accepted offer within the first two weeks on the market, just below the 57.1% record set during the four-week period ending March 28.
• 43.5% of homes that went under contract had an accepted offer within one week of hitting the market, down from the 43.9% record set during the four-week period ending May 9.

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