Quite a few sellers across the U.S. are cutting prices High mortgage rate And the fear of a potential recession keeps many prospects away.
According to a recent report by Redfin, more than 25% of metro home sellers tracked by brokerage firms across the country dropped their asking prices in June.
In some regions, more than 60% of sellers have reduced prices, and reports say that “it became a common feature of the air-conditioned home market, especially where it was popular with homebuyers in the early days of the pandemic.” ..
Redfin Chief Economist Darryl Fairweather told FOX Business that 30-year mortgage rates are much higher than they were at the beginning of the year, “actually digging into homebuyers’ budgets.”
30-year fixed mortgage rates, according to mortgage buyer Freddie Mac Average 5.54% This week is up from 5.51% a week ago.
Some homebuyers have to drop out of the buying market altogether, Face the rental marketOthers are still in the game, but “much less willing to bid for prices or entertaining overpriced homes,” Fairweather added.
Buyers are “more volatile”, so sellers are making concessions and lowering prices. According to Fairweather, sellers can no longer afford to choose from dozens of offers as they did earlier this year.
According to the analysis, Boise, Idaho, accounted for 61.5% of the largest share of buyers and lowered the asking price. This is an increase from 25.7% in June 2021.
According to the report, Denver, Colorado and Salt Lake City, Utah were not far behind, with 55.1% and 51.6% of sellers cutting prices.
Almost half of the sellers in Tacoma, Washington. Grand Rapids, Michigan and Sacramento, California have also cut prices.
Boise, Salt Lake City, Sacramento and Tampa were popular hotspots between the summer of 2020 and March 2022. Home buyer relocated Taking advantage of the low interest rates on mortgages and working from home, we came in from an expensive coastal job center, “says Redfin.
But their popularity went against them.
“Their popularity is Limited supply of housing For sale, it pushes prices up and doesn’t make them affordable for many buyers. ”
For example, according to a report, a typical Boise home sold for $ 550,000 in May, 60% higher than it was two years ago. Similarly, the price of a typical Sacramento home has risen 44% to $ 610,000.
“Consumer sentiment is also reluctant for homebuyers to increase their budgets,” Fairweather added.
According to Fairweather, homebuyers are not only worried about inflation continuing to rise, but also about what happens if the economy goes into recession and unemployment rises.
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“Homebuyers don’t want to be in a situation where they can’t afford a mortgage because they don’t have the income they thought they had,” Fairweather added.
Here are the top 10 metros that had the largest share of seller dropsping June price:
- Boise, Idaho: 61.5%
- Denver, Colorado: 55.1%
- Salt Lake City, Utah: 51.6%
- Tacoma, WA: 49.5%
- Grand Rapids, Michigan: 49.3%
- Sacramento, CA: 48.7%
- Seattle, WA: 46.3%
- Portland, Oregon: 45.7%
- Tampa, Florida: 44.5%
- Indianapolis, Indiana: 44.1%