Home Sellers Slashing Prices At Fastest Rate In Nearly Two Years: What's Going On?

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Zinger Key Points
  • Median sale prices hit records in the month of May 2024.
  • Data points to the highest number of price cuts in nearly two years, which could suggest struggles ahead.

A look at weekly and monthly data could show that homes for sale are seeing price cuts and fewer people are buying new homes, as consumers continue to grapple with high mortgage rates.

What Happened: The median sale price of a home hit an all-time high of $390,613 in a recent report from Redfin Corp RDFN.

While the overall price of homes sold was strong, there could be some signs that the housing market faces struggles due to high mortgage rates.

Redfin reported the median asking price for a home was $416,623, down around $3,000 from the previous week. The median asking price saw its first decline in six months.

The report also showed that 6.4% of home sellers cut the asking price on their homes in the four-week period ending May 26. This is the highest percentage of asking prices being cut since November 2022.

The amount of time homes were on the market also rose in May for the first time in eight months.

Purchase applications were down 1% year-over-year for the week ending May 26 and down 10% year-over-year.

Related Link: Could You Still Afford Your Home If You Had To Buy It Today? Nearly 40% Of Homeowners Say They Couldn’t

Why It's Important: Redfin suggested that the data of price cuts and lower selling prices could soften the home selling market.

The data comes as high mortgage rates continue to be a concern for consumers. In the report, the daily average 30-year fixed mortgage rate was 7.34%, up from 6.99% two weeks earlier and higher than the 6.95% in the previous year's comparative period.

The weekly average mortgage rate is 6.94% in the report, which marks the first time the rate is below 7% since early April.

Another leading indicator from Redfin is Google searches for "homes for sale." The report showed the searches were the same from the prior month but down 14% year-over-year.

The summer months can be a popular time for families to look for new homes ahead of an upcoming school year. The data indicated high mortgage rates could greatly impact the homes for sale inventory ahead.

Read Next: How Do Mortgage Interest Rates Work

Photo: Shutterstock

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