A Seller’s Market No Longer? Buyers Regain Control as Competition Weakens

Homebuyers are regaining some control as the housing market loses its momentum in the second quarter of 2022, but a more even playing field comes at the cost of waning affordability. As 5% mortgage rates and still rising home prices prevent more prospective buyers from making home purchases, pending sales are dropping, sellers are lowering their asking prices, and inventory is beginning to rise, Redfin reports.

The median home sale price rose 16% year-over-year to $400,999 during the four-week period ending May 29, causing a 14% year-over-year drop in mortgage purchase applications.

“The sudden surge in mortgage rates led to a sudden and significant cooldown in the housing market in May,” said Redfin Economics Research Lead Chen Zhao. “However, mortgage rates are now stabilizing and homes remain in short supply, so while we do expect home-price growth rates to decline, we don’t expect prices to fall much at the national level. For homebuyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up."

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