The housing market just saw its biggest August logjam since before the pandemic
The housing market saw its biggest slowdown during the month of August in five years.
Forty-eight percent of homes on the market took 60 days or longer to be sold, per Redfin data.
That's up from 43.2% the year before, a sign demand for homes is still cooling.
The housing market this year had its biggest August slowdown since the pandemic, according to Redfin.
In a report published Wednesday, the real-estate listings firm said 48% of its US home listings had been on the market longer than 60 days as of the end of August, the biggest share for any August since 2019.
That's up from 43.2% the year before. It's also the fifth straight month in which the share of homes on the market for that long has climbed — a sign that more houses are growing stale as demand cools. Generally the summer tends to be a weak period for home sales.
Redfin said in another report that existing-home sales slumped by 1% month over month in August, to their lowest levels since May 2020.
Cities in Florida and Texas dominated Redfin's list of slow housing markets in the US. In West Palm Beach, Florida, the median home was listed for 79 days before being sold. That was followed by Fort Lauderdale, Florida, and Jacksonville, Florida, where homes stayed on the market for medians of 75 and 65 days.
"We usually see home sales pick up when mortgage rates fall, but this year we are seeing the opposite — sales are dropping and homes are sitting longer on the market," Sheharyar Bokhari, a Redfin senior economist, said.
He continued: "Last week's big interest-rate cut by the Federal Reserve will give buyers a boost in confidence, but it remains to be seen whether sales will speed up in any meaningful way as we move into the slower fall season."
At its latest policy meeting, the central bank cut interest rates by 50 basis points, which was expected to influence mortgage rates to tread lower. But forecasters say borrowing costs will probably stay elevated in the near term, with Redfin suggesting the 30-year fixed mortgage rate is likely to remain above 6% through the end of the year.
Still, not all housing markets in the US have grown stale. Redfin said Seattle was the hottest housing market in the nation last month, with homes staying on the market for a median of 12 days. That was followed by Indianapolis and Warren, Michigan, where homes stayed on the market for medians of 16 and 17 days.
Daryl Fairweather, Redfin's chief economist, said buyers might also be pickier about the homes they make an offer on.
"Anyone who has been paying attention to the housing market over the past few years knows that desirable homes sell right away," Fairweather said. "Now if a home is still on the market after a few weeks, buyers assume there's something wrong with it. That's why it's so important to price your home to move quickly. Buyers see the days on market, and when it starts to tick up, it's like a scarlet letter."
More sellers have resorted to slashing prices in a bid to attract buyers. Redfin said the share of homes whose prices were cut in August rose to 20.3%, the highest share for an August in five years. (Realtor.com recently gave a slightly lower figure, 19.3%, which it too described as the highest share in the past five Augusts.)
Correction: September 27, 2024 — An earlier version of this story misstated the most recent year-over-year August housing slowdown. The share of homes on the market that Redfin said took 60 days or longer to be sold rose to 48% from 43.2%; it did not rise by 43%. The story also misspelled the name of Redfin's chief economist. She is Daryl Fairweather, not Darryl Fairweather. Additionally, the story misattributed an estimate for the share of homes whose prices were cut in August. The 19.3% figure came from Realtor.com, not Redfin, which separately gave an estimate of 20.3%.
Read the original article on Business Insider
