This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Homebuyers Show Signs of Exhaustion

Stocks in this article: XHB IYR

NEW YORK ( TheStreet) -- Homebuyers have been chasing a limited supply of homes at a frenzied pace for months, but there are signs that they may be running out of breath.

According to real estate broker Redfin , the percentage of homes that went under contract within two weeks decreased for the third consecutive month in July, falling to 29.2% from 20% in June and 32% in April. Of course, this is still a frenetic pace. Last July only 20.5% of homes went pending within two weeks. In July 2011, only 12.6% sold that fast.

Plus, this is vacation season, so maybe they will come back. But it could be that rising home prices and higher interest rates are giving buyers reason to take a break.

The National Association of Realtors said Wednesday that existing home sales rose 6.5% to a seasonally adjusted annualized rate of 5.39 million units, a four-year high.

But it reported that inventory conditions were still very tight. The average time on the market was 42 days, up from 37 in June. About 45% of homes sold in July were on the market for less than a month.

Home prices are rising sharply amid this shortage of supply, even though higher interest rates is likely to moderate future gains. The NAR report said median home prices rose 14% from a year earlier in July.

The FHFA said Thursday that prices of homes purchased with loans from Fannie Mae and Freddie Mac rose 7.5% over the last four quarters.

The Redfin Fastest Real Estate Markets Report ranks 23 markets across the country measured by the percentage of homes that go under contract within two weeks of their debut. The metrics include single-family homes, condos, and townhouses listed in the Multiple Listing Service.

California remains the fastest market. In San Jose, 45% of new listings went into contract within two weeks, down slightly from 46.3% in June.

Three other California cities -- San Francisco, Ventura and San Diego -- also top the list of the fastest markets.

Las Vegas and Raleigh, N.C. saw the fastest pick-up in the pace of homes being snatched off the market in July. About 29% of the homes in Vegas went into contract in less than two weeks from listing, up from 18% in June.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs