Monthly mortgage payments for the average homebuyer rose $50 over the last six weeks.
Redfin’s Housing Market Update reported that, despite concerns about affordability and price, homes are still selling fast, with about half being sold within two weeks. The $50 increase is a result of prices increasing 12% year-over-year.
Homes are on average selling about 1% above asking price, though listings with price drops are increasing slightly. The number of homes sold above list price was up 13% year-over-year to 47%, but the smallest share since April.
“Mortgage rates and asking prices are both on the rise, which translates to higher housing costs,” said Redfin Chief Economist Daryl Fairweather.
“For now, mortgage rates are still hovering near 3%, and demand remains strong. However, we are likely to see rates tick up into the winter months, which could slow demand just like it did in late 2018. As that happens, sellers will have a harder time getting buyers to bite on their sky-high asking prices.”
The Federal Reserve has indicated it will start tapering its bond-buying perhaps as soon as next month, with interest rate increases possibly coming sooner than expected. But some expect mortgage rates won’t change drastically as a result.
“The pending taper and change to the monetary policy outlook will likely contribute to a modest increase in mortgage rates over the medium term,” MBA chief economist Mike Fratantoni said of the Fed’s tapering plan.
The Redfin report also found the median asking price reached an all-time high at $365,073. Asking prices rose in September, which Redfin suggests is a typical seasonal increase.
Pending sales rose 3% year-over-year, the smallest annual increase since June 2020. New listings declined 8% annually, continuing a trend of below 2020 levels that started at the beginning of August. Active listings dropped 23% from last year.
The number of homes that had an accepted offer within two weeks rose 4% from last year to 46%. Homes with accepted offers within one week rose 3% year-over-year to 33%. Homes remained on the market for a median of 21 days, up from the record-breaking low of 15 days in June and July, but down from 31 days at this time last year.