Half of homes sold above asking price last month, but some wonder if demand has peaked

by Liz Hughes

Half of all homes sold above asking price during the four weeks ending May 16, marking a 23% increase from the same period last year, according to a new Redfin report

While several housing data points also broke new records, pending sales for the seven days ending May 16 dropped 10% from four weeks before (in 2019 that same period showed an 8% increase) suggesting homebuying demand may have peaked for the year. 

“We are seeing some early signs that the market has reached its maximum temperature,” Redfin Chief Economist Daryl Fairweather said in a press release. “Mortgage purchase applications and pending sales have decreased, which may be a sign that some buyers would rather spend their money on restaurants, vacations, and other things they have held back on for the past year, instead of on housing now that the threat of the pandemic is dissipating in America.”

The average sale-to-list price ratio was a record high of 101.7%, up 3.2% year over year as the average home sold for 1.7% more than its asking price. 

Home prices also hit a record high of $352,975, up 24% year over year, as asking prices increased from $352,975 to $358,975, hitting another record.

The number of days on market hit a record low at 17, down 18 days from the same period a year before. 

Homes under contract with an accepted offer within two weeks of being listed also hit a record high, at 58%. 

The report also found 45% of homes had an offer accepted within a week of being listed, down slightly from the record high in the four weeks ended May 9. 

Compared to 2019, the report also found pending home sales increased 22% from the same period, with new home listings down 12%. Active listings fell 49%.

Additionally, the report noted a 4% week-over-week decline in mortgage applications. Thirty-year mortgage rates rose slightly to 3% for the week ending May 20. 

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