Daniel Acker | Bloomberg | Bloomberg | Getty Images
Home sellers are nervous as the once-hot housing market is cooling rapidly.
According to Realtor.com, 1 in 5 sellers lowered their asking price in August. A year ago, that share was just 11% for him.
In the four weeks ending August 28, the average home fell below list price for the first time in over 17 months, according to a Redfin report.
Homes just aren’t selling at the breakneck pace they were six months ago. At the time, strong demand was catching up with tight supply, and bidding wars were commonplace, with sellers often signing contracts within the weekend. Homes were on the market for an average of five days longer in August than they were a year ago.
The supply of homes for sale is also growing rapidly, with fewer sellers deciding to list, but up nearly 27% from a year ago. July pending sales, representing signed contracts for existing homes, are the latest available sales data and are nearly 20% lower than July 2021, according to the National Association of Realtors. .
“For many today’s buyers, the growing number of housing options on the market has taken away the sense of urgency they felt during the past two years when inventory was scarce,” said Daniel Hale, chief economist at Realtor.com. “As a result of this change, coupled with higher mortgage rates, competition has cooled further in August, and list price trends show homebuyers are tightening their purse strings.”
The median listing price in August was 14% lower than in August 2021 and nearly 42% lower than in August 2019, according to Realtor.com.
Mortgage rates have been on the rise since January, and after hitting a recent high in June, fell slightly in July and much of August. However, they are on the rise again and are now nearly matching his June highs.
Redfin reported a 16% drop in agent requests for home tours and other home-buying services at the end of August compared to the same period last year. His touring activity is also down 9% year-to-date, and he’s up 11% over the same period last year, according to home tour technology company ShowingTime.
“The post-Labor Day slowdown this year is going to be a little more intense than last year, when markets were very tight,” said Darryl Fairweather, chief economist at Redfin. “Expecting homes to stay in the market could again lead to a slight uptick in the share of sellers who cut prices.”