Existing Home Prices Fell 1.2% in February—The First Annual Decline Since 2012
Redfin reported on Friday (3-17-23) that the median US home price fell 1.2% in February, marking the first year-over-year decline since 2012.
Redfin noted that home purchases continued to level off in February, after a sharp pullback in the second half of 2022. Pending home sales have now hovered around the same level since November. They increased 0.3% in February from January (prior to seasonal adjustment) but were down 26% from February 2022, which is an improvement from the 35.5% record annual drop in the fall of 2022.
Redfin reported that new listings in February were at their lowest level on record aside from the start of the pandemic. Seasonally adjusted, listings fell 23.3% year-over-year and were down 3.5% from January. Redfin believes homeowners are hesitant to put their properties up for sale because many of them have locked in mortgage rates well below current levels. The same potential home sellers are also concerned that they see sellers in their neighborhood reducing their listing prices in order to get a transaction completed.
Of note, Redfin reported that 14.2% of homes for sale in February had a price cut. That is down from 22% in the fall of 2022 but still nearly double the rate of 5.7% from February 2022.
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