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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 64 August 2024 J O U R N A L sale and the fact that many listings are becoming stale. In certain areas, this allows purchasers to purchase a property for less than the asking price and bargain for additional cost savings, such as assis- tance with home repairs or closing costs. Declining rates should bring many homebuyers back to the market soon, which means competition would tick up and home prices would increase even faster than they already are," Fairweather said. "It's also possible rates drop further in 2025, which would make monthly costs decline more and increase compe- tition even more. One thing is for sure: lower rates will lead to more home sales." During the four weeks ending July 7, the median price of a home sold in the U.S. reached an all-time high of $397,482, up 4.7% year over year—the largest gain in over four months. This is supported by a recent analysis from the tech-driven real estate company Redfin (redfin.com). The median sale price has risen to a new all-time high for the ninth week in a row. Home Sale Prices Soar Despite the fact that rising mortgage rates are discouraging people from buying homes, sale prices have stayed stubbornly high; pending house sales are down 3.5% year over year and mortgage- purchase applications are down 13%. This is partially due to historically low inventories, which drives up costs and decreases sales. Additionally, a contributing factor is that final transaction prices are a lagging signal, reflecting agreements reached a month or more ago between buyers and sellers. There are indications that the price increase may shortly slow down. For the first time since 2020, when the pandemic's beginning almost completely shut down the housing market, the average house is selling for 0.4% less than what it was listed for at the beginning of July. Furthermore, only 32% of properties are selling for more than the asking price, which is the lowest percentage at this time of year since 2020 and a decrease from 36% a year earlier. Inventory is increasing year over year even if it is still historically low, which is another indication that price rise may slow down in the upcoming months. The number of properties for sale has increased by 18.3% overall and by 7.3% for new listings, with the majority of them becoming stale: Over 60% of properties are on the market for at least a month without a contract being signed. Part of the reason for the increase in home sales is that mortgage rates have been at double pandemic-era lows for almost two years, and sellers are fed up with waiting for rates to go down before buying a new property. "Homes are sitting longer than they usually do this time of year, which has led to some—but not all—homes selling for a little bit less," said Julie Zubiate, a Redfin Premier Agent in the Bay Area. "The longer rates stay high; the pickier buyers are getting. Buyers will jump ship or try to negotiate the price down with any sort of tiny problem; sellers should take the time to prep, price and promote their homes correctly to find the right buyer. That being said, there is one segment of the market that is still moving fast, with homes going over asking price with multiple offers: Move-in ready homes with big backyards located in desirable school districts."