Luxury home prices rose 3.2 percent year over year to an average of $1.7 million in the third quarter of 2018, according to Redfin. This is the lowest growth rate since the fourth quarter of 2016, when prices were up 1.1 percent from a year earlier.

The Redfin analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent most expensive homes sold in the quarter. The average price for the bottom 95 percent of homes was $343,000, up 3.6 percent in the third quarter compared to a year earlier, but down from the second quarter's 5.1 percent growth rate.

"A great deal of the slowing price growth among luxury homes can be explained by the stock market, a strong indicator of luxury homebuyers' wealth, or at least their perceived wealth," said Daryl Fairweather, chief economist at Redfin. "The stock-market fluctuations that began last quarter likely caused some uncertainty among wealthy individuals, which has made luxury buyers more sensitive to price. The swings many people have been watching in their stock portfolios have only grown more frequent in recent weeks, so we expect this trend of slowing luxury home price growth to continue at least into the end of the year."

Luxury homes went under contract after an average of 65 days on market, eight fewer days than in the third quarter of last year and tied with the second quarter for the fastest pace on record since Redfin began tracking this metric in the first quarter of 2009. The market for non-luxury homes also sped up in the third quarter, with homes spending an average of 49 days on market, nine fewer days than last year.

"We have seen homes go under contract faster every year since 2015. Buyers are able to look at more homes more quickly in part thanks to real estate technology," said Fairweather. "For example, a potential home buyer can use Redfin's website to go on virtual tours, or immediately book a home tour using Redfin's book-it-now feature."

Luxury homes sold fastest in San Jose, Calif., where they found buyers in an average of 19 days, followed by Ashburn, Va. (23); Oakland, Calif. (28); Seattle (29); and San Francisco (44).

Biggest Gainers, Losers

Cities in Florida and Nevada saw some of the nation's largest increases in luxury home prices in the third quarter. In West Palm Beach, Fla., the average sale price for a luxury home shot up 54.5 percent over last year to $1.7 million. Luxury home prices were up 29.6 percent in Reno, Nev., 26.0 percent in Boca Raton, Fla., and 22.5 percent in Miami.

"There are a lot of people selling average/modest multi-million-dollar homes in the Bay Area and buying true luxury homes in Reno," said Jaime Moore, agent for Redfin. "Buyers coming from the Bay Area find themselves with strong purchasing power and are able to easily afford luxury homes in Reno."

The average price for a luxury home fell the most in Vero Beach, Fla., down 46.1 percent year over year last quarter. Prices for high-end properties also fell in St. Petersburg, Fla., (-16.8%); Fort Lauderdale, Fla., (-16.4%); Sarasota, Fla., (-8.4%); and Delray Beach, Fla. (-8.3%).

Sales Rise Anemic 3.2%

For luxury sales and supply trends, Redfin analyzed a group of homes priced at or above $2 million, rather than the top 5 percent of homes in each city. Sales of homes priced at, or above $2 million, were up 3.2 percent in the third quarter, the ninth consecutive quarter of sales growth, but the smallest rate of growth since early 2016.

The number of homes for sale priced at or above $2 million fell 6.0 percent year over year in the third quarter of 2018 compared to a year earlier. Interestingly, inventory of homes priced under $2 million is slightly increasing as of the third quarter, but the luxury market is still seeing a decrease in the number of homes for sale compared to a year earlier.

Interest rates on conventional purchase-money mortgages increased from September to October across the U.S., according to several indices of new mortgage contracts from the Federal Housing Finance Authority .

• The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.75 percent for loans closed in late October, up 13 basis points from 4.62 percent in September.
• The average interest rate on all mortgage loans was 4.72 percent, up 9 basis points from 4.63 in September.
• The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.87 percent, up 10 basis points from 4.77 in September.
• The effective interest rate on all mortgage loans was 4.81 percent in October, up 9 basis points from 4.72 in September.  The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
• The average loan amount for all loans was $315,100 in October, up $9,000 from $306,100 in September.

Ellie Mae has selected Dan Madden to serve as executive vice president and chief financial officer.

“I am excited to join Ellie Mae at such a pivotal time for the company,” said Madden. “Ellie Mae has been an industry leader for two decades and I’m thrilled to join the seasoned team as we continue on the path together toward transforming the mortgage industry.” He will report to Jonathan Corr, Ellie Mae’s president and CEO, and start with the firm next month.

Madden serves as chief financial officer for Revel Systems, a cloud-based POS platform, where he leads the growing organization’s finance team. Prior to joining Revel, he was the CFO at Cepheid, a publicly traded leading molecular diagnostics company; and VP finance and corporate controller at Symmetricom, where Madden led the company’s finance, accounting and investor relations functions. Previously, Madden worked at Sonic Solutions, Advanced Fibre Communications, and McKesson. Madden began his career with Ernst & Young and holds a bachelor’s of science in business administration from California State University, Sacramento.

“Ellie Mae is leading the industry as we drive toward our mission of providing the true digital mortgage to lenders of all sizes,” said Jonathan Corr, president and CEO, Ellie Mae. “Dan’s extensive financial, operational and strategic experience coupled with his knowledge of technology and SaaS businesses will be a huge asset to Ellie Mae as we continue to grow. We look forward to having Dan’s leadership and expertise on our team.”