Home News Average US Homes Selling Below Listed Price as Market Slowdown Continues

Average US Homes Selling Below Listed Price as Market Slowdown Continues

by admin
0 comment

The average American home is selling below asking price for the first time since March 2021, according to online brokerage data. redfin.

According to Redfin, the average selling price ratio fell to 99.8% in the four weeks ending August 28, the first time it has fallen below 100% in almost 18 months.

The number of listings showing price drops remained at 7.5%, the same as in the previous four-week period.

The median home sale price was $370,000, up 6% year-over-year, according to the report.

Some home prices are down 6% from their all-time high of $393,725 in the four weeks ended June 19, according to Redfin.

From 2020 to 2022, the pandemic-triggered housing boom sparked a fierce bidding war among homebuyers, with people buying up the limited supply of available housing, causing home prices to skyrocket and Partly led to the current shortage.

The Federal Reserve has tried to curb 40 years of high inflation since March by raising its benchmark interest rate, leading to a surge in mortgage rates and the end of the housing boom.

The Fed is widely expected to push for further rate hikes after its September policy meeting.

Rising mortgage rates over the past few months have driven home prices down, pushing many first-time buyers out of the market and forcing sellers to cut prices.

As a result, many homeowners said in a July report that their home values ​​were declining as the U.S. housing market weakened, causing a decline in wealth.pdf) from mortgage analysis firm Black Knight.

Sales of new homes in July plunged to their slowest since early 2016 as buyer demand plummeted, but the supply of homes increased as low sales restored available inventory.

Fall domestic market forecast

“This year’s post-Labor Day slowdown is likely to be a little more intense than last year, when markets were very tight,” Redfin chief economist Darryl Fairweather said in a statement.

“Although the cooldown appears to be easing, there are indications that the market has more room to ease,” he said.

Falling home prices continue to prevent many sellers from entering the market, slowing new listing growth despite an increase in total inventory.

The buyer’s market also remains weak despite the softness in home prices.

Mortgage applications and pending sales levels are much lower than they were during the boom just a year ago.

Home loan applications were down 2% week-on-week in the week ending 26 August and were down 23% from the same period last year.

With mortgage rates soaring to all-time highs in June and fixed interest rates on 30-year loans briefly above 6%, the fall sales season is expected to see further declines in the housing market.

Average interest rates on 30-year fixed-rate mortgages rose to 5.66% in the week ending 1 September. according to To Freddie Mac’s Primary Mortgage Market Research.

Interest rates surged from last week’s 5.55%, nearly doubling from last year’s 2.87%.

On the other hand, the share of discounted properties finally leveled off in August, and the housing market is showing signs of flattening out for the time being.

Fairweather said, “We may see a slight uptick again in the share of sellers pushing down prices in hopes that homes will stay in the market.”

“As homebuyers’ budgets are increasingly squeezed by rising interest rates and ongoing inflation, sellers will need to make their homes and prices attractive to attract buyers’ attention during this busy period. I have.”

But some, like Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, are optimistic about the market in the longer term and hope for an eventual market recovery.

“Although there are no signs yet of a recovery in purchase offers, a strong job market and rising housing inventories should eventually lead to an increase in buying activity.” He said.

follow

Bryan S. Jung is a New York City resident with a background in politics and the legal industry. He graduated from Binghamton University.

You may also like