Home Price Decrease Shows Market Moving Toward Normal

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In a sign that the hot housing market may be transitioning to something resembling normal, the median home sale price in early August fell short of setting a new record—the first time that’s happened since March, according to a new report.

The median sale price was $362,750 in the four-week period ending Aug. 1, real estate firm Redfin said in a report Friday. That’s up 18% from the same period a year earlier, but essentially unchanged—down 0.2%—from the previous week, ending a five-month streak of record prices. Other data also pointed to a slowdown: Asking prices fell 1% to $358,475, down from the peak reached in the four weeks ended June 27. Pending home sales also dropped slightly, as did the sale price of homes relative to their asking price. Homes sold at an average of 2.1% above the asking price, slightly below the peak of 2.3% reached in the four weeks leading up to July 4.

The new report is the latest indicator that the housing market is simmering down after a year of out-of-control price increases as buyers seeking more space to work from home competed for a low supply of houses for sale. Low mortgage rates also helped fuel demand.

“Trends for home prices, sales, and new listings are starting to resemble the patterns we typically expect for this time of year, which is news after a year of unpredictable and insatiable demand for homes,” Redfin said in its report. “Although homes are much pricier than they were before the pandemic, homebuyers now have the benefit of very low mortgage rates and a little less competition than they faced earlier in the summer,” said Redfin Chief Economist Daryl Fairweather in the report.

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