A record number of homesellers are dropping their prices as buyers continue to feel the impact high mortgage rates are having on their wallets.
During the four weeks ended Oct. 29, almost 7% of sellers dropped their prices, the highest it’s ever been, according to a new report from Redfin.
That record drop in prices comes as mortgage rates hit their highest level in 23 years, forcing would-be buyers to take a step back to avoid steep mortgage payments.
The average 30-year fixed mortgage rate for the week ending Nov. 2 was 7.51%, down from 7.9% a week earlier. That relief, however, is not enough to entice buyers in today’s market as those rates have a big impact on monthly payments for potential homebuyers and deter potential sellers.
Despite sellers slashing prices, home sale prices are still up from last year, but Redfin says we may see growth slow in the months ahead, as those prices are up due to a lag in data.
For the four weeks ended Oct. 29, the median U.S. home sale price rose 3.4% from 2022, a jump Redfin attributes to elevated mortgage rates hampering prices this time last year.
And while the total number of homes for sale fell 10% from last year, new listings increased for the second time since July 2022, up 1%, partly due to new listings falling a year ago, the report said.
Redfin says its agents describe today’s housing market as “a mismatch between sellers’ high expectations and the reality of buyers’ budgets, saying it’s more important than ever for sellers to price fairly from the start to attract buyers and sell quickly.”