MReport May 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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M REPORT | 45 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Homes Are Selling Faster Than Ever Before Well more than half of all listed homes are under contract within two weeks, according to a recent report. But analysts say some buyers "have reached their limit on bidding wars and soaring prices." C onsidering recent re- ports revealing just how competitive one must be to purchase a home in most parts of the country it should come as little surprise that Redfin just reported that homes today are selling faster than any time in recorded home-selling history. Redfin analyst Tim Ellis reports that 59% of listed houses are under contract within two weeks. While demand is still intense, Redfin's research showed some early indications that an increas- ing number of potential buyers are throwing in the towel as prices climb to new heights and mortgage rates tick up. "Some homebuyers have reached their limit on bid- ding wars and soaring prices," Redfin Chief Economist Daryl Fairweather said. "Add to the mix a dwindling number of homes for sale and rising mortgage rates, and the typical family that is still searching for an affordable house may have missed the boat. First-time homebuyers who were already stretching their budgets will have to make bigger com- promises on size and location or resign to renting for another year. However, those who are flexible should look to the condo market where there's still a bit less com- petition. Looking ahead, Biden's infrastructure plan aims to incentivize zoning for multifamily homes, which could increase the supply of affordable homes and provide even more people a path to homeownership, but there is no guarantee the incentives would be enough for local governments to change their zoning practices." Redfin's researchers showed year-over-year comparisons. In many instances, atypical stats can be attributed to stay-at-home- orders a year ago that halted both homebuying and selling activity. A recap: • The median home-sale price increased 17% year over year to $335,613, an all-time high. • Asking prices of newly listed homes rose 14% year over year to $353,500, an all-time high. • Pending home sales were up 38% from the same period in 2020, and up 28% from the same period 2019, which was a more typical year for the housing market. Compared to the previous four-week period, pending sales grew just 0.9%, the smallest growth between two reports since the four-week period ending February 21. Between the same periods in 2019, pending sales rose 6%. • New listings of homes for sale were down 2% from the same period in 2020, and down 5% from the same period in 2019. • Active listings (the number of homes listed for sale at any point during the period) fell 42% from the same period in 2020 to a new all-time low. This is the largest decrease on record in this data, which goes back through 2016. • 47% of homes that went under contract had an accepted offer within one week of hitting the market, an all-time high and up from 33% during the same period a year earlier. • 41% of homes sold for more than their list price, an all-time high and 16 percentage points higher than the same period a year earlier. • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased to 100.4%, an all-time high and 2 percentage points higher than a year earlier. • For the seven-day period end- ing March 28, the seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—was up 148% from the same period a year ago, when housing demand was near the lowest point it would hit dur- ing the pandemic. Compared with the same one-week period in 2019, demand is up 57%. • Mortgage purchase applica- tions decreased 2% week over week (seasonally adjusted) and were up 39% from a year earlier (unadjusted) during the week ending March 26. For the week ending April 1, 30-year mortgage rates increased slightly to 3.18%, the highest level since June.

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