real estate trends

Watch these 3 indicators for a housing market slowdown

By Mike Simonsen on April 11, 2022

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Mike Simonsen

A true data geek, Mike founded Altos Research in 2006 to bring data and insight on the U.S. housing market to those who need it most. The company now serves the largest Wall Street investment firms, banks, and tens of thousands of real estate professionals around the country.

I’ve been debating how to report each week since we’re in the difficult intersection in the market. On the one hand interest rates have spiked to the highest point in years, prices and demand must react to that right? On the other hand we’ve had the most intense buyer demand in decades for homes and there is so much momentum and cash ready to deploy that we are simultaneously hitting new record home prices each week. So, is this a bull market or a bear market? Are these buyer opportunities or seller opportunities? Let’s walk through the latest data and maybe together we can arrive at the right way to describe this market.


Every week Altos Research tracks every home for sale in the country. We analyze all the pricing, supply and demand, and all the changes in that data and we make it available to you before you see it in the traditional channels. I’m Mike Simonsen, I’m the CEO of Altos Research. Let’s see the details for the week of April 11, 2022.



The median price of single family homes in the US jumped again this week to $415,000. That’s up over 1% from last week and 10% from last year. It’s April and home prices surge in the second quarter every year to reach their peak in high summer. So in that sense the fact that home prices are surging isn’t surprising. Prices move like this every year. We have 10 weeks more of rising house prices and we’ll likely peak around $435,000 by then. Even as mortgage rates are higher. That’ll keep us in a 10% year over year price gain range from last year. We have a few more months to go before prices plateau in the summer.


I only have anecdotes about it, but there seems to be a lot of home buyers with cash who are waiting on the sidelines right now. They want to avoid the hyper competitive bidding that we’ve had for 18 months now. That may be a good strategy.


The other implication though of that phenomenon is that we have enough buyers waiting for opportunities that as soon as any opportunity arises - more inventory or softer prices, those buyers are ready to pounce. That is one way in which any coming softer real estate market, maybe from recession or higher rates, the downside would be tempered.


You can see this in the three weeks of down market we had in April 2020. We had three weeks of price declines before people stepped in for the deals. This happened despite the fact that the economy was tanking and well before any stimulus hit. Buyers were waiting and they put a three-week floor on any real estate market crash.


New Listings

The leading indicator price of new listings stepped down this week to $410,000. Normally by April the new listings have settled into their plateau previewing the plateau of the whole market later in the year. Right now the New Listings prices are staying very elevated. If you’re looking for signs of a cooling market, the price of new listings is a leading indicator. If I’m going to list my house, I will start to take a little discount when I see the neighbor’s house didn’t get any offers. But if I know there were 50 bidders, I don’t drop my price just because mortgage rates are climbing. I use the actual data I can see. So as the market slows, one way will be to watch the light red line on this chart. The market hasn’t slowed at all yet.


Available inventory of unsold single family homes is rising each week. It is not spiking or surging but we’re up to 261,000 single family homes unsold on the market. That’s an increase of 2.3% from last week and 5% higher than the lowest point ever. The curve is lower than last year, but trending up earlier, so that is encouraging for those buyers who are waiting for opportunity later in the year.


Incidentally this week Thursday April 14 is our monthly webinar. We’ll spend an hour diving into all the details including the latest on our inventory forecast for how the rest of 2022 shapes up. We’ll look at local markets and preview some cool new things coming from Altos Research. There’s a link to register for the webinar in the description below. We’ll have 6 or 700 people signed up for that. You should join us too.


If you’ve been paying attention, you’ll know that our immediate sales tracker is one area I keep a close eye on each week. We’ve had such intense buyer demand and bidding wars that homes sell immediately. As demand cools later this year, we’ll expect to see more inventory and fewer immediate sales. This week 26,000 homes got listed and went into contract essentially immediately. That’s 29% it’s a ton, but it’s actually the lowest percentage of new listings sold immediately since New Years. Is that the first signs of a trend? That’s what we’re watching each week.


One other notable thing is that we’re running slightly behind last year’s record level of home sales. That’s maybe a little demand change but mostly because we have even more dire supply constraints now than we did even last year. You can buy what’s not there. Something to keep an eye on there too. Total volume.


Price Reductions

Here’s the third of our leading indicators for the day. We’ll hit more of these in more detail in the webinar Thursday. But real quickly here are the price reductions. Percent of homes on the market that have taken a price cut recently. Slightly more price reductions than last year and ticking up each week. There are now 17.5% of homes on the market that have taken a price cut. Normally we’d expect a 25-30% of the market with price cuts right now. Let’s see if price reductions climb over 30% later in the year. If you’re interested in home sales prices, you can use this chart to see the trend in transactions that will happen in the future. Asking price cuts now for lower transaction prices later.


Ok that’s all the data we have time for this week. As you can see, the higher rates haven’t deterred any buyers yet.
But we do have the leading indicators to study what to expect for later this year. We’ll report them here before you can see it in the traditional channels.
As always - this market is nuts, and your clients probably scared, they need to know what’s going on. To get your Altos data to them now, go to right now and book time with our team and get consult with your local market data.



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