Median Sale Price Reaches $426K, Marking Only the Second Time in U.S. History
According to a monthly market report by Redfin, June’s median sale price reached its second-highest level ever due to dangerously-low inventory levels. Multiple inventory indicators hit record lows during the month, with a 15 percent year-over-year decline in the total number of homes for sale, the largest annual decrease in two years according to Redfin’s analysis. New listings experienced a sharp decline of 30.6 percent year over year, totaling 450,000, resulting in homebuyers competing for just 1.8 months of supply.
Despite the lack of available homes, Redfin’s Chief Economist, Daryl Fairweather, noted a steady increase in homebuyer demand, leading to the resurgence of bidding wars. This surge in competition drove the median U.S. home sale price to $426,056 in June, just 1.5 percent below the all-time high of $432,397 in May 2022.
Fairweather remarked, “Today’s housing market is exceptional, with a great deal of activity despite the limited number of homes changing hands. Sellers are receiving multiple offers for well-priced homes in desirable areas, even with a limited pool of buyers.”
She further explained, “This scarcity of available homes is attracting more buyers, as they gradually adjust to elevated mortgage rates, intensifying the market even further.”
The report highlights intense competition in affordable markets, with Rochester, NY (+13.1%), Milwaukee, WI (+11.6%), and Omaha, NE (+10.4%) leading the way in annual median sales price gains. Conversely, pandemic boomtowns such as Boise, ID (-10.4%), Austin, TX (-7.8%), and Las Vegas (-7.8%) experienced significant declines in annual sales prices.
Kimberly Hogue, a Redfin agent based in Rochester, emphasized that high mortgage rates have not deterred homebuyers in the area. She mentioned that buyers can still find attractive listings at relatively affordable prices. However, aggressive offers are necessary to outmaneuver the competition.
“In Rochester, we haven’t really felt the impact of high mortgage rates on homebuyer demand,” Hogue said. “You can still find a nice house in a desirable part of town for $300,000 or less, and many people here can comfortably afford the monthly payments for homes within that price range. Of course, these homes often sell for tens of thousands of dollars above the asking price.”
According to Redfin data, the real estate market is experiencing a surge in competition, with 46.8% of home offers written by Redfin agents in June facing competition. While this figure is slightly lower compared to last year and significantly below the peak seen in January 2022, pending sales data indicates that this trend may continue throughout the summer.
Although seasonally-adjusted pending sales have declined by 16.2% on an annual basis, they have shown a positive trend over the past three months, with June pending sales increasing by 1.9% and reaching the highest level since October 2021.
Redfin agent Hogue shared her experience, stating that she has witnessed an influx of remote workers moving in and locals opting to move further out in search of more space. She mentioned a recent rural listing that received over 20 offers, including one bidder who even offered to send the sellers on a cruise. However, the sellers ultimately chose an offer that exceeded the asking price by $100,000.
Chief Economist Fairweather commented on the current market conditions, noting that homebuyer demand has reached a stable level. While high interest rates continue to give some buyers pause, the impact is not as severe compared to the significant rate hikes observed last year. Additionally, with home prices near record highs, buyers are now less worried about potential depreciation.
Overall, the real estate market is witnessing fierce competition, and buyers are adapting to the challenging environment to secure their dream homes.