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The property market in the US has been in a price tug-o-war between supply and demand for over two years and, according to Redfin’s CEO Glenn Kelman, things are finally starting to look reasonable again. More and more homeowners who were holding on to their property in expectation of better mortgage rates are finally facing the reality of the situation. With close to 2,000 lead agents and operating across 100 markets in Canada and the US, Redfin is one of the bigger players in the US housing market.
Housing prices are already falling across the country, with some significant cuts in costs in Florida and Texas. On one hand, the median US home sale price is as high as it has ever been, at $394,000 in the four weeks leading up to the end of the first week of June. On the other, asking prices are declining steadily, pushed by growing supply. Homeowners are being pressured by their own needs, financial and otherwise, to finally put up their homes for sale. Commenting in a recent interview on ‘The David Lin Report’, Kelman elaborated; “A lot of our customers are folks who got a divorce last year, and the husband and the wife are driving each other crazy, or they own a townhouse, and they’ve had a third child, and they’re just bursting at the seams.” As the description reveals, a moving market is as much a consumption-related decision for the supplier as the consumers themselves.
According to Redfin’s housing data, which goes as far back as 2012, the number of homes that had remained in listings for over a month has been increasing steadily for quite some while. According to their database, two in five listings sit on the market for two months – or more. The situation has remained unchanged since 2023 and is a 27.8% increase since 2022. Meanwhile, the number of new listings and the speed at which listings are increasing are growing steadily, up from 13% since last March.
The only change so far is the slight decline in the daily average mortgage rates, resulting in increased applications for mortgage purchases. Another housing cost factor reigniting the market is the slow dip in monthly payments: the typical homebuyer’s monthly housing payment fell by $30 below April’s peak to a new average of $2,829. Redfin estimates that mortgage rates will continue to fall throughout the summer despite the solo interest rate slash that the Federal Reserve promised for the rest of the year. Indeed, the only cause for fear is whether demand will outstrip supply, in which case there is a danger that prices could surge even further.
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