House Costs Fell in February, in First 12 months-Over-12 months Decline Since 2012

Whereas Friday’s launch marks the primary time a full-month value decline has appeared in Redfin’s information in a decade, weekly updates from the brokerage present the median house costs measured over four-week rolling intervals started to fall beneath year-ago ranges in mid-February.

The decline in Redfin’s median sale value may foreshadow an identical month-over-month drop when the Nationwide Affiliation of Realtors releases its existing-home gross sales information for February subsequent Tuesday. Whereas house costs and modifications recorded by the 2 separate information units aren’t a precise match, they each are inclined to observe related patterns.

12 months-over-year house value progress in information from each Redfin and the Nationwide Affiliation of Realtors peaked above 25% in Might 2021 and fell into the single-digits in July 2022. The median existing-home in January offered for $359,000, a rise of 1.3% from the yr prior, the Realtors affiliation stated; the median house tracked by Redfin, in the meantime, was offered for a value 1.4% greater than the identical month a yr prior.

Ought to the Nationwide Affiliation of Realtors’ February information observe Redfin’s, it could mark a major shift: The commerce group in January stated that costs had risen from year-ago ranges for 131 straight months—or simply beneath 11 years—a streak it says is the longest on file. Economists usually examine new information to prior-year costs due to housing market seasonality.

The decline in Redfin’s information captures a cut-off date when quickly-rising mortgage charges stretched potential patrons’ funds. The typical weekly rate of interest on a 30-year fixed-rate house mortgage gained greater than half a proportion level from the primary week in February via the primary week in March, in line with
Freddie Mac.
That rise in charges added roughly $100 to the month-to-month price of shopping for a $400,000 house.

Sellers in February pulled again: Redfin stated its measure of recent listings was at its lowest stage on file, apart from the beginning of the pandemic.

The report wasn’t all dangerous information. Seasonally-adjusted closed house gross sales gained 1.8% from the month prior, the brokerage stated—an increase it characterised as the biggest seasonally-adjusted month-over-month acquire in additional than a yr, although closed gross sales have been roughly 23% beneath year-ago ranges.

What number of of those tendencies proceed is but to be seen. “It’s price noting that the housing market shifted in March following the collapse of Silicon Valley Financial institution,” Redfin’s Lily Katz wrote within the Friday launch. “Ongoing turmoil within the banking sector lowered the chance of the Federal Reserve climbing rates of interest rather more this yr.”

Mortgage charges fell consequently, Katz stated. Redfin stated on Thursday that patrons utilizing its mortgage lending firm locked in mortgage charges on extra loans on Friday, March 10 than every other day to date in 2023.

Write to Shaina Mishkin at [email protected]