Are home prices finally beginning to cool off? Recent data suggests that we might be seeing the first signs of a shift in the market, as more sellers are now willing to reduce their asking prices compared to any time last year.

According to a recent report from Redfin, 6.4 percent of sellers across the country cut their asking prices during the four-week period ending May 26. This is the highest percentage of price reductions since November 2022. Additionally, the median asking price dropped by approximately $3,000 last week, bringing the national median to $416,623. While this figure remains high, the decline is notable given that it's the first drop in six months.

Several other indicators point towards a potential slowdown in price growth. For instance, homes are staying on the market longer. In May, the median listing time increased to 46 days, marking the first rise in eight months. Moreover, active listings have increased by 15.2 percent year-over-year, reaching the highest level since December 2022.

Despite these trends, buyers are still facing high costs. The median home sale price has risen 4.3 percent from a year earlier, reaching an all-time high of $390,613. Additionally, pending sales have dropped by 3.4 percent year-over-year.

On a slightly positive note, the costs of monthly housing payments have fallen to $2,812, the lowest level in six weeks. This is largely due to softening weekly mortgage rates, which have provided some financial relief to homeowners. However, this may be a temporary reprieve, as daily average mortgage rates have started to rise again.

Even with mortgage rates hovering closer to 7 percent than 8 percent, prospective homebuyers have faced a steady stream of challenges since the end of the early pandemic buying frenzy. The latest Case-Shiller report revealed that home prices reached an all-time high in March, with a 6.5 percent year-over-year increase. For the fourth consecutive month, all markets tracked in the 20-City Composite reported annual price jumps.

What Does This Mean for Buyers and Sellers?

For sellers, the current market conditions suggest that it might be wise to be flexible with pricing to attract buyers, especially as more homes are staying on the market longer. For buyers, while prices remain high, the increase in listings and slight drop in median asking prices could provide more opportunities and potentially better deals.

Stay tuned to our blog for the latest updates on the housing market and what these trends mean for you. Whether you're buying or selling, staying informed is key to making the best decisions in today’s dynamic market.

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Posted by Andy Mandel on
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