Sellers Are Dropping Asking Prices as Housing Demand Slows

At a time when homebuying demand is usually skyrocketing after the winter months, unfavorable market conditions are instead causing a drop in buyer activity all across the U.S., Redfin reports. New listings are down 7% year-over-year, while the average 30-year fixed mortgage rate is up to 5%. 

As if a lack of inventory and unyielding mortgage hikes weren’t discouraging enough, the median asking price also recently climbed to $397,747, pushing the average homebuyer’s monthly payment 35% higher year-over-year to a record $2,288. Buyers aren’t the only ones backing out of a volatile housing market, however. Sellers are also hesitant to enter into a contentious buyer pool in the opposite side of the market after leaving their current homes, creating an even more limited supply for buyers everywhere.

“There really is a limit to homebuyer demand, even though the market over the past few years has made it seem endless,” said Redfin Chief Economist Daryl Fairweather. “The sharp increase in mortgage rates is pushing more homebuyers out of the market, but it also appears to be discouraging some homeowners from selling. With demand and supply both slipping, the market isn’t likely to flip from a seller’s market to a buyer’s market anytime soon.” 

Read more