Daily Archives: March 6, 2024

New Listings Post Biggest Uptick In Nearly 3 Years, But Buyers Show Restraint as Rates Rise

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More sellers are listing their homes, but 7% mortgage rates and still-high home prices are pushing down sales

Seattle, WA – February 29, 2024 (BUSINESS WIRE) (NASDAQ: RDFN) New listings of U.S. homes for sale rose 13% year over year during the four weeks ending February 25, the biggest increase in nearly three years, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Total inventory is also improving: Active listings are flat from a year ago, marking the first time in nine months the total number of homes for sale hasn’t declined.

That’s welcome news for homebuyers, who have been battling the dual challenges of low inventory and high mortgage rates for over a year. But while today’s buyers have a few more homes to choose from, they’re still facing historically high housing costs. The typical homebuyer’s mortgage payment is $2,671, just $47 shy of last October’s record high.

High costs pushed pending sales down 8%, the biggest decline in five months, and mortgage-purchase applications declined for the fourth straight week. But more house hunters are searching as more homes hit the market. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other services from Redfin agents–is up 10% from a month ago to its highest level since last September. Pending sales could improve in the next few months if rates don’t increase further and new listings continue to rise.

“House hunters are out there, and competition picks up every time mortgage rates decline a bit,” said Brynn Rea, a Redfin Premier agent in Spokane, WA. “I’m telling buyers who can afford it to look now while they have more breathing room and less competition. They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%.”

Leading indicators

Indicators of homebuying demand and activity
 Value (if applicable)Recent changeYear-over-year changeSource
Daily average 30-year fixed mortgage rate7.15% (Feb. 28)Up from 6.92% a month earlierUp from 6.78%Mortgage News Daily
Weekly average 30-year fixed mortgage rate6.9% (week ending Feb. 22)Up from 6.77% a week earlierUp from 6.5%Freddie Mac
Mortgage-purchase applications (seasonally adjusted) Down 5% from a week earlier (as of week ending Feb. 23)Down 12%Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted) Up 8% from a week earlier; up 10% from a month earlier (as of week ending Feb. 25)Down 9%Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale” Up 7% from a month earlier (as of Feb. 24)Down 8%Google Trends
Touring activity Up 12% from the start of the year (as of Feb. 25)At this time last year, it was up 14% from the start of 2023ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending February 25, 2024Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
 Four weeks ending February 25, 2024Year-over-year changeNotes
Median sale price$365,8885.4%Biggest increase since Oct. 2022 (with the exception of the 4 weeks ending Feb. 11, when there was a 5.5% increase)
Median asking price$396,9755.5% 
Median monthly mortgage payment$2,671 at a 6.9% mortgage rate7.7%Down less than $50 from all-time high set in October 2023
Pending sales75,947-7.7%Biggest decline since Oct. 2022
New listings79,35412.9%Biggest increase since June 2021
Active listings763,254UnchangedFirst time active listings haven’t posted a YoY decline since June 2023
Months of supply3.9 months+0.2 pts.4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks37.9%Up from 36% 
Median days on market48-3 days 
Share of homes sold above list price23.6%Up from 22% 
Share of homes with a price drop5.8%+1.6 pts. 
Average sale-to-list price ratio98.4%+0.4 pts. 
Metro-level highlights: Four weeks ending February 25, 2024Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
 Metros with biggest year-over-year increasesMetros with biggest year-over-year decreasesNotes
Median sale priceNewark, NJ (15.5%)San Diego, CA (15.3%)Montgomery County, PA (14.5%)Pittsburgh (13.9%)Anaheim, CA (13.5%)  San Antonio, TX (-5%)Detroit (-0.4%)  Declined in 2 metros
Pending salesAustin, TX (5.7%)Milwaukee (3.7%)Minneapolis (2.6%)Cleveland (1.2%)Pittsburgh (0.6%)Cincinnati (0.6%)San Antonio, TX (-29.8%)New Brunswick, NJ (-19.4%)Warren, MI (-18.3%)Atlanta (-16%)Houston (-15.6%) Increased in 6 metros
New listingsDallas (35.5%)Jacksonville, FL (34.3%)Austin, TX (31.6%)Fort Worth, TX (29.8%)Miami (25.7%) Atlanta (-5.8%)Newark, NJ (-5.4%)Milwaukee (-4.6%)Providence, RI (-4.3%)Chicago (-1.5%)Warren, MI (-0.9%)Declined in 6 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-new-listings-increase-pending-sales-decline/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.

Contacts

Redfin Journalist Services:
Kenneth Applewhaite, 206-414-8880
press@redfin.com

Home Buyers Need To Earn $47,000 More Than In 2020

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The income needed to comfortably afford a home is up 80% since 2020, while median income has risen 23% in that time

  • Those shopping for homes today need to make more than $106,000 a year to comfortably afford a home.
  • A mortgage payment on a typical U.S. home has nearly doubled since 2020.
  • Pittsburgh, Memphis and Cleveland are the most affordable markets. Households in California need to make the most money to afford a home.

SEATTLE, Feb. 29, 2024 (PRNewswire) Home shoppers today need to make more than $106,000 to comfortably afford a home, a new Zillow® analysis finds. That is 80% more than in January 2020, showing how the math has changed for hopeful buyers, who are more often partnering with friends and family or “house hacking” their way to homeownership.

In 2020, a household earning $59,000 annually could comfortably afford the monthly mortgage on a typical U.S. home, spending no more than 30% of its income with a 10% down payment. That was below the U.S. median income of about $66,000, meaning more than half of American households had the financial means to afford homeownership.

Now, the roughly $106,500 needed to comfortably afford a typical home is well above what a typical U.S. household earns each year, estimated at about $81,000.1

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow. “Buyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.”

A monthly mortgage payment on a typical U.S. home has nearly doubled since January 2020, up 96.4% to $2,188 (assuming a 10% down payment). Home values have risen 42.4% in that time, with the typical U.S. home now worth about $343,000. Mortgage rates ended January 2020 near 3.5%, keeping the cost of a home affordable for most households that could manage the down payment. At the time of this analysis, mortgage rates were about 6.6%.

For a household making the median income, it would take almost 8.5 years before they would have enough saved to put 10% down on a typical U.S. home, about a year longer than it would have in 2020.2 It’s no wonder, then, that half of first-time buyers say at least part of their down payment came from a gift or loan from family or friends.

With the cost of a mortgage rising, most millennial and Gen Z buyers say “house hacking” — the ability to rent out all or part of a home for extra cash — is very or extremely important. Co-buying with a friend or relative is another way to help with affordability, something 21% of last year’s buyers reported doing.

Metro areas where a buyer could comfortably afford a typical home with the lowest income are Pittsburgh ($58,232 income needed to afford a home), Memphis ($69,976), Cleveland ($70,810), New Orleans ($74,048) and Birmingham ($74,338). The only major metros where a typical home is affordable to a household making the median income are Pittsburgh, St. Louis and Detroit.

There are seven markets among the major metros where a household’s income must be $200,000 or more to comfortably afford a typical home. The top four are in California: San Jose ($454,296), San Francisco ($339,864), Los Angeles ($279,250) and San Diego ($273,613). Seattle ($213,984), the New York City metro area ($213,615) and Boston ($205,253) complete the list.

To help find a home within budget, home shoppers on Zillow can filter search results by monthly cost instead of by list price. The tool simplifies the complex calculation of translating a home’s list price into the monthly cost, factoring in the latest mortgage rates.

Those needing a down payment boost may qualify for down payment assistance. Home listings on Zillow include a down payment assistance module to help shoppers see what local resources could be available to them.

Metropolitan
Area*		Size
Rank		Income Needed
to Afford a
Mortgage,
January 2024		Change in
Needed
Income Since
January 2020		Zillow Home
Value Index
(ZHVI),
January
20243		Monthly
Mortgage
Payment,
10% Down4		Years to
Save a
10%
Down
Payment
Pittsburgh, PA27$58,232$23,675$201,487$1,2865.3
Memphis, TN43$69,976$31,717$230,807$1,4736.9
Cleveland, OH34$70,810$30,227$211,712$1,3516.0
New Orleans, LA46$74,048$19,203$232,870$1,4867.0
Birmingham, AL50$74,338$31,875$246,805$1,5756.7
Oklahoma City, OK41$74,732$31,057$226,048$1,4426.3
Detroit, MI14$75,662$31,124$236,025$1,5066.1
Buffalo, NY49$76,884$34,744$242,435$1,5476.5
St. Louis, MO21$76,895$31,880$238,231$1,5205.9
Louisville, KY45$77,450$31,185$243,810$1,5566.8
Indianapolis, IN33$82,037$38,150$267,301$1,7066.6
Cincinnati, OH28$86,027$38,050$267,423$1,7066.8
Kansas City, MO31$92,896$40,742$289,290$1,8467.2
Houston, TX5$95,374$39,779$300,955$1,9207.5
San Antonio, TX24$95,767$38,307$283,161$1,8077.5
Columbus, OH32$95,821$43,405$297,637$1,8997.3
Milwaukee, WI40$100,822$42,613$321,037$2,0498.5
Virginia Beach, VA37$102,703$43,989$332,820$2,1248.2
Chicago, IL3$104,757$39,716$300,906$1,9206.7
Richmond, VA44$106,170$47,930$349,558$2,2317.9
United States0$106,536$47,490$342,941$2,1888.4
Philadelphia, PA7$109,257$47,837$343,102$2,1897.5
Jacksonville, FL39$109,271$51,617$348,665$2,2258.2
Charlotte, NC23$111,051$55,239$368,712$2,3539.2
Hartford, CT48$114,109$52,114$334,712$2,1367.3
Minneapolis, MN16$114,344$41,867$355,511$2,2697.3
Baltimore, MD20$114,348$44,063$367,861$2,3477.6
Atlanta, GA9$115,430$55,989$370,548$2,3648.0
Tampa, FL18$116,329$58,577$370,474$2,3649.8
Las Vegas, NV30$119,529$54,172$407,516$2,60010.6
Dallas, TX4$121,398$53,679$366,690$2,3408.3
Orlando, FL22$121,418$58,140$386,687$2,4679.9
Nashville, TN36$128,535$59,508$425,827$2,71710.1
Raleigh, NC42$130,472$62,410$430,562$2,7478.7
Phoenix, AZ11$131,322$65,017$447,074$2,8539.9
Providence, RI38$142,928$65,387$449,025$2,86510.1
Austin, TX29$149,267$65,144$451,322$2,8808.8
Miami, FL8$151,163$74,834$472,970$3,01812.3
Salt Lake City, UT47$154,455$72,592$523,832$3,34310.6
Portland, OR25$161,624$65,664$528,724$3,37411.0
Washington, DC6$166,551$64,078$539,116$3,4408.2
Sacramento, CA26$172,261$69,908$559,243$3,56911.6
Denver, CO19$172,704$71,338$566,692$3,61610.7
Riverside, CA13$173,375$81,676$563,468$3,59512.6
Boston, MA10$205,253$86,967$650,890$4,15311.6
New York, NY1$213,615$78,696$627,944$4,00712.9
Seattle, WA15$213,984$94,163$697,824$4,45312.2
San Diego, CA17$273,613$131,018$902,199$5,75716.9
Los Angeles, CA2$279,250$121,457$918,247$5,85919.4
San Francisco, CA12$339,864$119,614$1,104,853$7,05016.0
San Jose, CA35$454,296$191,071$1,493,255$9,52818.8

*Table ordered by income needed to afford a mortgage in January 2024.

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences.

Zillow Group’s affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

1 Median household income is taken from the American Community Survey (ACS) through 2022. Present-day estimates combine changes in the Employment Cost Index provided by the Bureau of Labor Statistics to forecast current median household income.

2 Years to save figures assume a household saves 5% of its total income each month.

3 Smoothed and seasonally adjusted ZHVI.

4 Monthly mortgage payment includes principal and interest as well as estimated taxes and insurance for a 10% down payment on a home priced at that region’s ZHVI.

SOURCE Zillow