Nationwide, 6.4% of homesellers cut their asking price during the four weeks ending May 26 on average, the highest share since November 2022, according to a new report from Redfin.
The median asking price dropped roughly $3,000 to $416,623 in the last week, the first decline in six months. Additionally, for-sale supply is growing more stale: Age of inventory (the typical number of days active listings have been on the market) started rising year-over-year in May for the first time in eight months, hitting a median of 46 days.
Together, those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price remains up 4.3% year-over-year, still a record high—though sale prices are a lagging indicator because they’re typically negotiated at least a month before a deal closes.
Buyers did get a modicum of relief on housing costs this week. The typical U.S. homebuyer’s monthly housing payment dropped to $2,812, its lowest level in six weeks. Payments are declining because even though sale prices remain at all-time highs, mortgage rates have come down from their peak: The weekly average mortgage rate is 6.94%, the first time it has dipped below 7% since early April.
Other data seems to support that it is high costs that are dampening demand. Pending sales are down 3.4% year-over-year, on par with declines over the last month, and mortgage-purchase applications are sitting near their lowest level in six months. Low inventory is another factor pushing down sales. Even though 7.8% more new listings hit the market than during the same period last year, listing growth has been losing momentum for the last few months, leaving buyers with fewer homes to choose from than there typically are in May.
Christine Change, a Redfin Premier Agent in the San Francisco area, said in a statement that “well-maintained” properties that are priced affordably are still in high demand, with multiple offers. She suggested that those who wanted to negotiate and get a home at or even under asking price expand their search.
“My advice for those buyers is to be open-minded. Consider single-family homes that are a bit outdated but don’t need major renovations, and/or homes in lesser-known, non-trendy neighborhoods. That type of home tends to sit on the market longer, and buyers may be able to avoid competition,” she said.
