Redfin: Home Sales Drop to Lowest Level in Nearly Two Years
U.S. home sales fell to the lowest level in nearly two years, down 4.1% from a month earlier in July, according to a new report from online brokerage Redfin.
According to the report, pending home sales, a real-time indicator of homebuying demand, fell 2.5% to their lowest level since December.
Redfin noted hat homebuying demand is slipping largely because housing costs are historically high, pricing many would-be buyers out of the market. It said that the median U.S. home-sale price rose 3.2% year over year to $407,730, the highest July level ever, and the monthly average mortgage rate rose to a one-year high of 6.54%.
The brokerage said that widespread economic uncertainty was another factor that kept some would-be homebuyers on the sidelines in July.
Concerns about the labor market, inflation and the broader economy made some buyers hesitant to make a major financial commitment, especially with housing costs already near record highs. Redfin noted that uncertainty likely contributed to the decline in sales and pending sales.
Home-Sale Agreements Fall
Some buyers backed out after making offers on homes: 14% of July’s home-sale agreements fell through, the highest share since 2023.
“The housing market suffered from a mid-summer slump in July as would-be buyers grappled with record-high home prices, increasing mortgage rates and growing financial insecurity,” said Chen Zhao, Redfin’s Head of Economics Research. “Many Americans simply can’t afford today’s housing costs, while others are holding off because they’re worried about the economy and/or their job security. The silver lining is that the buyers who can afford a home may be able to negotiate on price and get concessions from sellers who are eager to offload their house.”
Redfin noted that some parts of the country are driving homebuying demand down.
For example, home sales are falling fastest in Texas—San Antonio (-12.6% year over year), Dallas (-10%) and Fort Worth (-9.9%), specifically. Detroit (-9.3%) and Seattle (-9.1%) round out the top five, Redfin said.
Pending home sales are falling fastest in Seattle, where they declined 15.6% year over year, Redfin noted. Seattle is followed by Houston (-14.3%) and Phoenix (-13.3%).
Redfin reported that Texas’ housing market is slowing partly because buyers have a lot to choose from after years of homebuilding. In some neighborhoods, sellers are competing with builders offering incentives on new homes, according to Redfin agents.
Meanwhile in Seattle, pending sales are dropping as would-be buyers contend with stubbornly high housing costs; the metro area’s median home-sale price is $809,479, about double the national average. Redfin said that prospective house hunters also are contending with a shaky tech job market with layoffs at major employers like Microsoft and Amazon hitting some workers’ finances hard, and made others less confident about their job security.
Layoffs Cause Caution
“Seattle is a tech-driven market, and right now a lot of buyers are feeling cautious about layoffs, AI and job security,” said Chase Costello, a Redfin Premier Agent in the Seattle area. “Tech workers aren’t moving between companies—or moving into the area—as much as they used to, and that means fewer people are trading up into new homes. Buyers are still out there, but they’re taking more time and being more careful about making a major purchase.”
Home Sales Surge in West Palm Beach, San Francisco and Milwaukee, Bucking National Trend
Demand is strong in some places. Home sales rose fastest in July in West Palm Beach, Florida, where they increased 17.1% from a year earlier. West Palm Beach is followed by San Francisco (8.5%) and Milwaukee (7%).
In South Florida and the Bay Area, affluent buyers who aren’t sensitive to cost are driving the market; in San Francisco specifically, the AI boom is also contributing to strong home sales.
