Redfin: Supply Inches Up As Demand Slows Down

May marked a turning point in the market. That’s the headline coming out of Redfin, with new analysis showing that buyers were gaining some control after an incredible two-year sellers market.

For the four week period ending May 29, more than one in five sellers dropped their asking price, the highest rate since October 2019. Additionally, the Redfin Homebuyer Demand Index declined 9 percent year-over-year, marking the seventh consecutive decline in the index.

Pending home sales were down 8 percent year-over-year, the largest decrease since May 2020. And new listings of homes for sale were flat from a year earlier.

Additionally, touring activity from the first week of January through May 29 was 27 percentage points behind the same period in 2021, according to home tour technology company ShowingTime. Touring activity was lower than the first week of January for the first time this year.

“The sudden surge in mortgage rates led to a sudden and significant cooldown in the housing market in May,” said Redfin Economics Research Lead Chen Zhao. “However, mortgage rates are now stabilizing and homes remain in short supply, so while we do expect home-price growth rates to decline, we don’t expect prices to fall much at the national level. For homebuyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up.”