Redfin: Asking Prices Come Down from Record High

Home sellers are increasingly ceding to the mounting pressure on affordability posed by rapid mortgage rate hikes, reported Redfin, Seattle.

The median asking price of newly listed homes for sale is down 1.5% from the record high it reached in the spring, and a record-high share of sellers dropped their asking price during the four-week period ending June 26, Redfin said. Pending sales continued to fall, posting their largest decline since May 2020, but there are signs that early-stage homebuyer demand is starting to level off.

“Data on home tours, offers and mortgage purchase applications suggest that homebuyers have noticed the shift in power and are no longer leaving the market in droves,” said Redfin chief economist Daryl Fairweather. “Buyers coming back will provide support to the housing market, but between now and the end of year I think the power will continue to shift toward buyers, resulting in mild price declines from month to month.”

Caroline Loudenback, a Seattle-area real estate agent, noted homebuyers worry about interest rates, having to go back to the office, getting laid off, and wondering if they can get a better deal by waiting out the market. “On the other side, sellers are adjusting to this new reality and learning that sometimes there’s not much they can do to increase buyer interest,” she said.

Leading indicators of homebuying activity:

  • For the week ending June 30, 30-year mortgage rates fell slightly to 5.7%, Redfin reported.
  • Fewer people searched for “homes for sale” on Google—searches during the week ending June 25 were down 7% from a year earlier.
  • The seasonally-adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—was down 15% year-over-year during the week ending June 26, but up 7 points from the previous week.
  • Touring activity as of June 26 fell 3% from the start of the year, compared to a 24% increase at this time last year, according to home tour technology company ShowingTime.
  • Mortgage purchase applications were down 24% from a year earlier, while the seasonally adjusted index was up 0.1% week over week during the week ending June 17.

Redfin reported the median home sale price was up 14% year-over-year to a record $399,249. The median asking price of newly listed homes increased 15% year-over-year to $405,547, but was down 1.5% from the record high set during the four-week period ending May 22.

The monthly mortgage payment on the median asking price home increased to $2,459 at the current 5.7% mortgage rate, but is down slightly from the peak of $2,494 during the four-week period ending June 12. This was up 45% from $1,694 a year earlier, when mortgage rates were 2.98%.