More sellers are dropping their asking prices, but buyers are finding little relief, according to a new Redfin study.
The share of homeowners dropping asking prices rose to a six-month high of 15% for the four weeks ended May 1, up from 9% last year, representing Redfin’s largest recorded annual gain.
During that same time period, monthly mortgage payments rose 42%, a new high. And even though more sellers are lowering prices, they are still outnumbered by buyers who continue to fight through low inventory to find a home.
The report found home sales are still incredibly brisk despite selling above asking at the fastest pace on record, squeezing homebuyers and causing some to take a step back from the market, according to Redfin chief economist Daryl Fairweather.
“Unfortunately for buyers hoping to find a deal as competition cools, sellers are pulling back even faster, which is keeping the market deep in seller’s territory,” Fairweather said. “So even though price drops are becoming more common, most homes are still selling above asking price and in record time.”
Redfin found fewer Google searches for “homes for sale” during the week ended April 30, down 7% from last year. Its Homebuyer Demand Index, which measures requests for tours and other services, fell 1% year over year during the week ended May1 and dropped 10% in the past four weeks. A year earlier, that decrease was just 1%.
Additionally, mortgage applications fell 11% from last year as the 30-year mortgage rate rose to 5.27% for the week ended May 5, the highest since August 2009.
In the four weeks ended May 1, active listings fell 18% year over year. The median asking price rose 16% from 2021 to a new all-time high of $408,458. Meanwhile, the median sale price increased 17% year over year to $379,230, the largest increase since August, to a record $396,125.
A record 56% of homes sold above list price, up from 47% last year.
The report also noted the monthly mortgage payment on a median asking-price home rose 5.27% to a record high of $2,404, up 42% from $1,688 last year when rates were 2.96%.