The pace of home sales has reached a fever pitch ahead of an expected Fed rate hike on Wednesday.
Of the homes that went under contract during the four weeks ended March 6, 58% had an accepted offer within the first two weeks of going on the market, and 45% had an accepted offer within just one week, Redfin reported.
“Homebuyers are in a frenzy,” Redfin deputy chief economist Taylor Marr said. “Buyers are reacting to changes in mortgage rates but are so far unfazed by the war in Ukraine, stock market volatility and rising oil prices. However, these risks are reaching levels that could be dangerous for the economy, and the Fed is on the cusp of raising rates further to cool inflation. The silver lining for housing is that the spike in mortgage rates has paused for now.”
Other housing metrics have reached record highs ahead of what economists expect to be a 0.25% increase in the federal funds rate, according to Redfin data.
The median home sale price of $369,125 represented a record high, having risen 16% year over year and 34% from the same time in 2020. The median asking price was also at a new high of $393,250 following a 14% year-over-year increase, Redfin noted.
The monthly mortgage payment on the median asking-price home hit a record high of $2,048 based on the current 3.85% mortgage rate. This represented a 22% gain from a year earlier, when mortgage rates were 3.05%, and a 33% increase from the same period in 2020, when rates were 3.36%.
Homes that sold were on the market for a median of 25 days, compared to 34 days over the same period in 2021 and 53 days in 2020, and 46% of homes sold above list price, compared to 36% a year earlier and 22% in 2020.
The average sale-to-list price ratio increased to 101.1%, meaning the average home sold for 1.1% above its asking price. This was up from an average sale-to-list price ratio of 99.7% in 2021 and 98.1% in 2020.