Pending sales were down 3% month over month and 6% year over year—both of which were the biggest drops in nearly a year

(NASDAQ: RDFN) —Sales of existing homes rose 0.6% month over month in July, but fell 2% year over year—to a seasonally adjusted annual rate of 4,094,991. That’s the lowest July level in records dating back to 2012. This is according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Pending sales—a more current gauge of demand that includes both existing and newly-constructed homes—fell to the lowest level of any month on record aside from April 2020, when the pandemic brought the housing market to a halt. They declined 2.9% from a month earlier and 5.8% from a year earlier—both the biggest declines in nearly a year on a seasonally adjusted basis.

Mortgage rates dropped in July and have fallen even further in August—giving house hunters more purchasing power—but buyers have been slow to react. That’s likely in part because home prices are still near their record high. The median sale price rose 4.1% year over year in July to $439,170. That’s just 0.7% below the all-time high of $442,389 set the prior month.

“When rates finally dropped, buyers got excited and we saw more activity. But now that rates have fallen to the mid-6%-range, people have been waiting to see if they’ll drop even more. Home prices are going up, though, so it really becomes six of one, half dozen of the other, ” said Nicole Stewart, a Redfin real estate agent in Boise, ID. “A lot of people are also concerned about the political climate. They can afford to buy, but have been holding off because it’s unclear where the country will be in six months. Though in reality, who is in the Oval Office probably won’t have much of an impact on the housing market.”

“Waiting around for mortgage rates to fall further isn't a surefire strategy,” said Redfin Senior Economist Elijah de la Campa. “If you have the means to buy and have been thinking about doing so, now actually might not be a bad time. That’s because mortgage rates have fallen enough to boost your purchasing power, but not enough to bring tons of buyers off of the sidelines and drive up competition.”

The Good News: More Homes to Choose From, and Fewer Selling for Above-Asking Price

There are a few encouraging signs for homebuyers aside from the dip in mortgage rates. For one, the total supply of homes for sale (active listings) rose a record 13.7% year over year in July.

Many listings on the market are getting stale as buyers grapple with high costs, which is causing supply to pile up—giving some buyers room to negotiate. The typical home that went under contract in July spent 34 days on the market, up from 29 days a year earlier and the longest of any July since 2020.

It’s worth noting that active listings did fall 0.6% from a month earlier in July—the first seasonally-adjusted decline in a year. New listings were little changed from a month earlier, and while they were up 2.9% year over year, they were still at the lowest level since last July.

Another silver lining for buyers: Only one-third of homes (33.2%) sold for more than their asking price, down from 38.2% a year earlier and the lowest share of any July since 2020.

Homebuyers Are Backing Out of Deals at a Record Rate

Roughly 59,000 home-purchase agreements were canceled in July, equal to 15.8% of homes that went under contract that month—the highest percentage of any July on record. Redfin’s records for this statistic date back to 2017.

Many house hunters are getting cold feet because housing costs remain high. Economic uncertainty is also high, with recession fears on the rise.

Buyers in Florida and Texas were most likely to back out of deals. Housing markets across both states have slowed considerably since the pandemic moving frenzy, with markets on Florida’s West Coast cooling faster than anywhere else in the nation amid rising supply and a climate-fueled insurance crisis.

In Tampa, 1,266 home-purchase agreements were canceled in July, equal to 21.9% of homes that went under contract that month—a higher share than any other major metro. Next came Fort Lauderdale (21.8%) and San Antonio (21.8%). The shares were lowest in Nassau County (5.4%), San Francisco (6.1%) and San Jose (7%).

Metro-Level Highlights: July 2024

• Prices: Median sale prices rose most from a year earlier in New Brunswick, NJ (14.6%), Detroit (13.5%) and Newark, NJ (12%). They fell in just two metros–Austin, TX (-2.6%) and Dallas (-1.2%)—and were flat in San Antonio.
• Pending sales: Pending sales rose most in San Francisco (13.5%), San Jose, CA (13.3%) and Newark (12.7%). They fell most in Houston (-22.1%), Minneapolis (-11.8%) and Atlanta (-9.8%).
• Closed home sales: Home sales rose most in San Jose (26.7%), San Francisco (17.4.%) and Providence, RI (17.3%). They fell most in West Palm Beach, FL (-7.7%), Detroit (-5.1%) and Austin (-4.1%).
• Active listings: Active listings rose most in Tampa, FL (51.8%), Cincinnati (49.4%) and Fort Lauderdale (49.1%). They fell in just one metro—Chicago (-1.6%)—and were up less than 1% in New York (0.7%) and Milwaukee (0.9%).
• New listings: New listings rose most in Providence (20.1%), San Jose (19.2%) and Las Vegas (18.4%). They fell most in Atlanta (-15.1%), Portland, OR (-12%) and Houston (-11.1%).
• Sold above list price: In Newark, 69% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came San Jose (65.5%) and Nassau County, NY (60.6%). The shares were lowest in West Palm Beach (7.8%), Miami (11.4%) and Fort Lauderdale (12.2%).

To view the full report, including charts please visit:

https://www.redfin.com/news/existing-home-sales-july-2024

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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