Sellers adjust to a new reality as asking prices fall
Asking prices for newly listed homes are starting to drop, says new report of red fin.
In the four-week period ending June 26, the median home sale price rose 13.6% year-over-year to $399,249. The median asking price for newly listed homes rose 14.7% from a year earlier to $405,547. Still, the median asking price was down 1.5% from the prior month.
Sellers are adjusting their expectations as buyers’ purchasing power declines, due to a combination of mortgage rates and weakened stock markets. The monthly mortgage payment on the median asking price has increased to $2,459 at the current mortgage rate of 5.7%. This represents a 45% increase from a year ago, when mortgage rates were 2.98%.
A record share of home sellers also lowered their prices over the four-week period analyzed, according to Redfin. On average, 6.5% of homes for sale have seen a price drop, which is the highest share ever recorded by Redfin since it started tracking the metric in 2015. However, the share of homes sold above the list price rose slightly year-over-year, from 53% in 2021 to 54% this year, but is 2.5 percentage points lower than it was in mid -May 2022.
“The data on home visits, offers and requests for mortgage purchases suggests that buyers have noticed the shift in power and are no longer leaving the market in droves,” said Daryl Fairweather, chief economist at Redfin. , in a press release. “Returning buyers will provide support for the housing market, but between now and the end of the year, I think the power will continue to shift towards buyers, which will cause prices to decline slightly from month to month. the other.”
Despite lower asking prices, the Redfin report highlighted multiple signs of slowing buyer demand, including the number of pending sales falling 13% year-on-year, the biggest drop since May 2020. In the week ending June 25, 7% fewer people searched for “homes for sale” on Google than a year ago. Additionally, home tour activity as of June 26 was down 3% year-to-date, compared to a 24% increase a year ago, according to data from Display time. In addition, in the metropolitan areas analyzed, 46% of housing under contract had an offer accepted within the first two weeks of being put on the market, compared to 49% a year ago.
Along with falling demand for home purchases is rising inventory. Redfin reported that the number of active listings fell only 8% year over year, which is the smallest drop since March 2020. However, compared to the previous year, the number of newly listed homes for sale decreased by 7%.
“Homebuyers are worried about interest rates, having to go back to the office, being laid off and wondering if they can get a better deal while they wait out the market,” said Caroline Loudenback, a real estate agent in the area. by Redfin Seattle. A declaration. “On the other hand, sellers are adjusting to this new reality and learning that sometimes there’s not much they can do to increase buyer interest. It’s a tricky market and you need to pay close attention to your local sales and listings to understand what’s going on.