Nationwide, 6.4 percent of homesellers cut their asking price during the four weeks ending May 26, on average, the highest share since November 2022, according to a new report from Redfin.
The median asking price dropped roughly $3,000 to $416,623 in the last week, the first decline in six months. Additionally, for-sale supply is growing more stale. Age of inventory (the typical number of days active listings have been on the market) started rising year-over-year in May for the first time in eight months, hitting a median of 46 days.
Together, those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3 percent year-over-year to another record high, though sale prices are a lagging indicator because they’re typically negotiated at least a month before a deal closes, according to Redfin.
“The market is slower than usual, but well-maintained properties listed for under $1 million still get multiple offers,” Christine Chang, a Redfin Premier agent in the Bay Area, said in a release. “People who are buying right now are typically doing so because they’re having a baby or looking for a more family friendly home. My advice for those buyers is to be open-minded: consider single-family homes that are a bit outdated but don’t need major renovations, and/or homes in lesser-known, non-trendy neighborhoods. That type of home tends to sit on the market longer, and buyers may be able to avoid competition and get a home for asking price instead of engaging in a bidding war. Buyers who can get by with less space should consider a condo; they’re relatively unpopular right now and many are going under asking price.”
Buyers did get a modicum of relief on housing costs this week. The typical homebuyer’s monthly housing payment dropped to $2,812, its lowest level in six weeks. Payments are declining because even though sale prices remain at all-time highs, mortgage rates have come down from their peak: the weekly average mortgage rate is 6.94 percent, the first time it has dipped below 7 percent since early April.
High costs are dampening buyer demand. Pending sales are down 3.4 percent year-over-year, on par with declines over the last month, and mortgage-purchase applications are sitting near their lowest level in six months.
Low inventory is another factor pushing down sales. Even though 7.8 percent more new listings hit the market than during the same period last year, listing growth has been losing momentum for the last few months, leaving buyers with fewer homes to choose from than there typically are in May, Redfin added.