Home Prices on the Rise as Demand Continues to Outpace Limited Supply

Redfin reported on Thursday (7-2-23) that during the four-week period ending on July 16th, the typical US home sold for $382,500. This is up 2.1% from a year earlier. It is also the largest increase since December 2022, and the second straight price uptick after nearly five months of declines.

Redfin notes that prices are rising in some metro areas, including Milwaukee, Wisconsin, where the housing market remained relatively steady during the pandemic. However, they are declining in other parts of the country, with the largest drops in places where prices soared throughout the pandemic, including Austin and Phoenix.

A combination of high home prices and mortgage rates have pushed the typical homebuyer’s monthly payment to a record $2,656 per month. Daily average mortgage rates are inching lower as inflation cools, but housing payments are likely to remain elevated because even slightly lower rates may escalate competition for the few homes on the market and push up prices for the near future, Redfin says.

Pending home sales are down 15% year-over-year, but new listings are down 25%, with homeowners with low mortgage rates choosing to stay in their current homes. The total number of homes for sale is down 16%, which represents the largest decline in a year and a half, and inventory also posted an unseasonal monthly decline as well.