One in five, or 21.1%, home sellers dropped their list prices during the four-week period ending May 22, according to Redfin.
Softening Housing Market Coming Into Focus
Redfin just released data indicating that 21.1%, almost one in five, home sellers lowered their home prices over the four-week time period ending May22. This is the highest percentage of property price drops since October 2019.
Metro areas that experienced huge influxes of new residents who drove up housing demand and housing prices over the past two years are now seeing the “other side” of the housing market. Some of the hottest destinations and housing markets in this last year are now seeing the largest shares of price reductions.
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According to Daryl Fairweather, Redfin’s Chief Economist, “The picture of a softening housing market is becoming more clear, especially to home sellers who are increasingly turning to price drops as buyers become more cost-conscious under higher mortgage rates.”
Home Price Drops Hitting These Cities Hardest
- Boise ID – 41% of its sellers lowered asking prices
- Cape Coral FL – 33%
- New Orleans LA – 32%
- Baton Rouge LA – 31%
- Sacramento CA – 30%
- Philadelphia PA – 29.5%
- North Port FL – 29.5%
- Ogden UT – 28%
- Indianapolis IN – 28%
- Provo UT – 28%
Other popular cities with relocating movers, cities such as Atlanta, Phoenix, San Antonio and Tampa FL, are also seeing more than 20% of sellers drop their asking home prices.
Median Home Sale Price Still High
Redfin also reported that, despite indications that sellers are lowering their prices and that the decade-long uptick in housing costs may be playing itself out, the median home sale price came in at $400,000 during this four-week period ending May 22. This $400,000 median home sale price represented an increase of +16% y/y.
The median asking price also climbed +17.8% y/y to a record of $418,000.
Combination of High Home Costs & Rising Interest Rates Puncturing Home Buying Demand
The Mortgage Bankers Association (MBA) reported that purchase originations plunged -16% y/y during this four-week period ending May 22.
Likewise, according to the National Association of REALTORS® (NAR),the MBA revised its 2022 forecast downward as the cost to produce a loan climbed to an all-time high.
Mike Fratantoni, the MBA’s Chief Economist, said the current mortgage situation “…is very, very challenging…and) …coming both from a reduction in revenue as pricing gets a little bit tighter, and we’re seeing – at least on dollar per loan basis – we’re at an all-time high in terms of costs to originate at about $10,600 per loan.”
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Thanks to National Mortgage News.
