Housing market indicators point to a slight cooling

The housing market is becoming more favorable to buyers as an increasing number of new sellers reduced their home's list price during the four-week period ended Aug. 29, Redfin said.

Even though the asking prices of newly listed homes were up 10% from the same time a year ago, to a median of $354,665, that number is the lowest since late April. Median listing prices are also 1.8% lower from the all-time high set during the four-week period ending June 27.

"Homes are taking longer to sell, which gives buyers more time to make thoughtful decisions about whether to make offers," Redfin Chief Economist Daryl Fairweather said in a press release. "And the fact that more sellers are dropping their list price is a sign that sellers have to be realistic about their price expectations."

A separate report from HouseCanary found that the median price for single-family listings was $381,728 for the week ended Aug. 27, a 7.7% increase year-over-year, but down 1.9% month-to-month.

"Monthly single-family listing prices have plateaued since May, while closed prices continue to edge marginally higher on a month-over-month basis," said Jeremy Sicklick, HouseCanary's CEO, in a press release. "Additionally, the sale-to-list price ratio has fallen slightly from its peak in June, bolstering our view that home prices — while still remarkably high — are beginning to show signs of cooling."

Redfin, which analyzes Multiple Listing Service data on a rolling four-week basis, found the median home-sale price increased 15% from the same period in August 2020 to $359,983.

New listings were flat compared with the previous year, as they have returned to the typical seasonal sales pattern. These were at a weekly average of 95,332 for the prior four weeks, versus 95,322 one year ago, Redfin said. The number of new listings is down 10% from the peak set during the four week period ended June 27.

There were 308,286 net new listings placed on the market in HouseCanary's analysis for the week ended Aug 27, a 10.7% decrease year-over-year. This was manifested in the lower end of the market, as listings under $200,000 were down 18.7%; between $200,000 and $400,000 listings declined 16.2%; and between $400,000 and $600,000 the number was down by 9.3%.

But at the upper end of the market, listings between $600,000 and $1 million rose by 2.4% and over $1 million increased by 4.7%.

The average sale-to-list price ratio decreased to 101.5%, according to Redfin. This was down 0.7 percentage points from its peak during the four-week period ending July 11 but up 2.3 percentage points from a year earlier.

Homes are taking longer to sell, but only slightly compared to the breakneck pace of sales over the past several months.

The average time from listing to sale in August was 18 days, up from the record low of 15 days in both June and July, Redfin said. However, the August average is still much faster than the 33 days it took one year ago.

Just under half of new listings, 48%, went to contract within two weeks, and 35% went to contract in one week. Each of these measures were down 8 percentage points from their respective peaks set for the four weeks ended March 28.