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Homes are being pulled from the market at a record pace, despite rising house prices and mortgage rates, according to a new report from Redfin.
About 59% of the houses that were contracted had an offer accepted within two weeks of reaching the market, a high point since the real estate agent started tracking data in 2012.
In the week ending March 28, 61% of homes were sold in two weeks or less, according to the data. Meanwhile, just under half of all households, about 47%, who were under contract, accepted an offer in one week, an increase of 33% over the previous year.
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At the same time, the report revealed that active listings fell 42% from the same period in 2020, which is an all-time low.
Still, more than 40% of the houses were sold above the original asking price, an all-time high, and about 16% more compared to the previous year, according to the data.
The “sold” signs remain for a long time while the construction of new homes continues in a new neighborhood in Northbrook, Illinois, Sunday, March 21, 2021. (AP Photo / Nam Y. Huh)
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The average selling price of a home was $ 335,613, another historic record and an increase of about 17% over last year.
However, as prices are rising, so are mortgage rates. The rate for a 30-year mortgage has risen to 3.18%, the highest level since June.
The rise in prices and mortgage rates, along with the “ever-decreasing number of homes for sale”, has made it more difficult for some to find an affordable home, according to Redfin’s chief economist, Daryl Fairweather.
However, Fairweather indicated that more affordable options may emerge after President Biden’s $ 2.3 trillion plan to repair the country’s infrastructure.
“Looking ahead, Biden’s infrastructure plan aims to encourage zoning for multi-family homes, which could increase the supply of affordable homes and provide even more people with a path to ownership,” said Fairweather.
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However, “there is no guarantee that the incentives would be sufficient for local governments to change their zoning practices,” he added.
Redfin analyzed 400 US metropolitan areas during the four-week period ending March 28 for the data. However, the broker warned that comparisons in the report “do not necessarily reflect how the housing market has changed in the past year” due to virus-related restrictions.
“Year-over-year comparisons may reflect more the fact that at this time last year, requests to stay at home interrupted the activities of buying and selling houses,” noted the broker.