In their latest market report for the 4-week period ending August 28th, Redfin, the Seattle-based real estate brokerage firm, is reporting that as the housing market cooldown continues, the average home sold for less than its list price. This marks the first time in over 17 months that selling below list has happened.
Since March 2021, the average sale-to-list ratio has been over 100%, meaning that the average home sold for more than its final asking pricing. This comes as the share of home listings with a price drop has finally begun to plateau.
Redfin notes that despite the easing in home prices, demand from homebuyers is still chilled—mortgage purchase applications and pending sales both saw large declines from a year ago—thanks in large part to another spike in mortgage rates, which rose to 5.66%, their highest level since June. Home sellers are also reluctant to step into the market: New listings and total inventory of homes for sale saw large declines, as well.
Adding additional background and her analysis to the report, Redfin’s Chief Economist Dr. Daryl Fairweather said:
“While the cooldown appears to be tapering off, there are signs that there is more room for the market to ease. The post-Labor Day slowdown will likely be a little more intense this year than in previous years when the market was super tight. Expect homes to linger on the market, which may lead to another small uptick in the share of sellers lowering their prices. Homebuyers’ budgets are increasingly stretched thin by rising rates and ongoing inflation, so sellers need to make their homes and their prices attractive to get buyers’ attention during this busy time of year.”
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Redfin Reports More Sellers Retreat Amid Falling Prices, Volatile Mortgage Rates