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Redfin Reports More Home Sellers Drop Their Asking Price As Mortgage Rates Hit Two-Decade High
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Record-high monthly mortgage payments are motivating sellers to drop asking prices to attract buyers, who are unwilling to pay a dollar more than necessary for their new home. Roughly one in 15 (6.5%) U.S. homes for sale had a price drop during the four weeks ending September 24, on average, up from 5.8% a month earlier–a sharp monthly increase compared to the same period in years past. The median home-sale price is up 3% year over year and the typical homebuyer’s monthly payment is at a record high as mortgage rates stay stubbornly elevated, with daily average rates hitting a two-decade high on September 27.
Positive
Sellers are dropping asking prices to attract buyers due to high mortgage payments. Median home-sale price is up 3% YoY.
Negative
None.
Record-high monthly mortgage payments are motivating sellers to drop asking prices to attract buyers, who are unwilling to pay a dollar more than necessary for their new home
SEATTLE--(BUSINESS WIRE)--
(NASDAQ: RDFN) — Roughly one in 15 (6.5%) U.S. homes for sale had a price drop during the four weeks ending September 24, on average, up from 5.8% a month earlier–a sharp monthly increase compared to the same period in years past. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. At the same time, the median home-sale price is up 3% year over year and the typical homebuyer’s monthly payment is at a record high as mortgage rates stay stubbornly elevated, with daily average rates hitting a two-decade high on September 27.
What this means for home sellers: Pricing your home right is a delicate science. Even though demand is relatively low, you’re likely to find a buyer who will pay a fair price. That’s because there are so few homes on the market, with total inventory down 15% year over year. But with monthly payments at an all-time high, buyers are picky and they don’t want to pay a dollar more than they need to. Be careful not to price too high, or you may be forced to cut your asking price to attract a buyer. “The feeling for buyers right now is this: For the interest rate I’m paying, this home better be exactly what I want or the price better be negotiable,” said Seattle Redfin Premier agent David Palmer.
What this means for homebuyers: Negotiate with sellers. It’s still tough to win a home for under asking price, but sellers have come to terms with the fact that 7%-plus mortgage rates are giving buyers cold feet and that homes aren’t as likely to attract multiple offers. Many sellers are open to making concessions, like paying for repairs or helping fund a mortgage-rate buydown. Additionally, new listings have posted an unseasonal uptick since the beginning of September, meaning buyers have a bit more to choose from if sellers aren’t willing to negotiate. “Buyers are using things like inspection negotiations and high insurance premiums to back out of deals,” said Jacksonville Redfin Premier agent Heather Kruayai. “They’re holding a lot of the cards; today’s sellers need to concede on some details to close the deal.”
Down 2% from a week earlier (as of week ending Sept. 22)
Down 27%
Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)
Down 6% from a month earlier (as of the 4 weeks ending Sept. 24), close to its lowest level since January
Down 7%
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”
Down 8% from a month earlier (as of Sept. 23)
Down 12%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending September 24, 2023
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
Four weeks ending September 17
Year-over-year change
Notes
Median sale price
$372,500
3.1%
Median sale prices are up partly because elevated mortgage rates were hampering prices during this time last year
Median asking price
$387,350
4.4%
Biggest increase since Oct. 2022
Median monthly mortgage payment
$2,666 at a 7.19% mortgage rate
8.5%
All-time high
Pending sales
76,294
-13%
New listings
81,579
-6.1%
Smallest decline in over a year, in part because new listings fell rapidly at this time in 2022
Active listings
811,325
-15.3%
Months of supply
3.2 months
+0.1 pt.
Highest level since February.
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks
38.8%
Up from 35%
Median days on market
31
-1 day
Share of homes sold above list price
31.8%
Unchanged
Share of homes with a price drop
6.5%
+0.2 pts.
Highest share since November 2022
Average sale-to-list price ratio
99.4%
+0.2 pts.
Metro-level highlights: Four weeks ending September 24, 2023
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
Metros with biggest year-over-year increases
Metros with biggest year-over-year declines
Notes
Median sale price
Anaheim, CA (14.2%)
San Jose, CA (10.6%)
Fort Lauderdale, FL (10.5%)
New Brunswick, NJ (10%)
Newark, NJ (9.8%)
Austin, TX (-4.4%)
Houston, TX (-2.2%)
San Antonio, TX (-1.7%)
Fort Worth, TX (-1.6%)
Las Vegas (-1%)
Phoenix (-1%)
Nashville, TN (-0.7%)
Dallas (-0.1%)
Declined in 8 metros
Pending sales
n/a
New York, NY (-36%)
New Brunswick, NJ (-27.3%)
Atlanta (-24.5%)
Providence, RI (-23.7%)
Seattle (-22.5%)
Declined in all metros
New listings
San Jose, CA (7.2%)
West Palm Beach, FL (4.1%)
Miami, FL (3.6%)
Cleveland (3.6%)
San Antonio, TX (3.3%)
Cincinnati (2.8%)
Minneapolis (1%)
Pittsburgh (0.7%)
Houston (0.5%)
Fort Lauderdale, FL (0.1%)
Atlanta (-30%)
Las Vegas (-17.7%)
Riverside, CA (-17.6%)
Portland, OR (-16.4%)
Newark, NJ (-16.2%)
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
redfin got its start inventing map-based search. everyone told us the easy money was in running ads for traditional brokers, but we couldn’t stop thinking about how different real estate would be if it were designed from the ground up, using technology and totally different values, to put customers first. so we joined forces with agents who wanted to be customer advocates, not salesmen. since these were our own agents, we could survey each customer on our service and pay a bonus based on the review. we deepened our technology beyond the initial search to make the home tour, the listing debut, the escrow process, the whole process, faster, easier and worry-free. and we gave customers more value, not just by saving each thousands in fees, but by investing in every home we sell, by measuring our performance and improving constantly. this is how real estate would be if it were designed just for consumers, because, well, it was.