Homebuyer demand is falling, home sellers are reducing their asking prices, and all measurements of market competition are plateauing, leading many experts to believe that the pandemic-driven housing frenzy may finally be coming to an end. Buyers are safeguarding their savings and lowering their budgets as mortgage rates climb higher, and the rest of the market is responding, Redfin reports.
On average, 4.8% of homes for sale each week had a price drop, while 19.1% dropped their price in the past four weeks, the highest share since October 2019. Though more gains are expected, 30-year mortgage rates decreased slightly to 5.1% for the week ending May 26.
“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,” said Redfin Chief Economist Daryl Fairweather. “For now, mortgage rates have stabilized, and I expect prices to do the same. This will remove some uncertainty for buyers. That means that as long as a home is priced conservatively, it still has a good chance of selling quickly.”