Current:Home > FinanceHome sellers cut list prices amid higher mortgage rates as spring buying season begins -PrestigeTrade
Home sellers cut list prices amid higher mortgage rates as spring buying season begins
View
Date:2025-04-23 18:39:39
More homeowners eager to sell their home are lowering their initial asking price in a bid to entice prospective buyers as the spring homebuying season gets going.
Some 14.6% of U.S. homes listed for sale last month had their price lowered, according to Realtor.com. That's up from 13.2% a year earlier, the first annual increase since May. In January, the percentage of homes on the market with price reductions was 14.7%.
The share of home listings that have had their price lowered is running slightly higher than the monthly average on data going back to January 2017.
That trend bodes well for prospective homebuyers navigating a housing market that remains unaffordable for many Americans. A chronically low supply of homes for sale has kept pushing home prices higher overall even as U.S. home sales slumped the past two years.
Home prices last year rose an average of 6.7% in the country's 20 biggest metro areas, according to the latest S&P CoreLogic Case-Shiller data. Across the nation as a whole, housing prices rose than 5% over the last year. Driving the increase are higher mortgage rates, which makes homeowners reluctant to sell their properties given the elevated costs of finding a new place, coupled with a dearth of homes on the market.
"It's just a sort of toxic brew that means that people are not willing to sell houses, and the people who are actually looking for them don't have a lot of stock, or don't have a lot of affordable options," said Javier E. David, managing editor for business and markets at Axios, told CBS News in February.
Just in time for spring, however, prices are beginning to thaw.
"Sellers are cutting prices, but it just means we're seeing smaller price gains than we would otherwise have seen," said Danielle Hale, chief economist at Realtor.com.
The pickup in the share of home listings with price cuts is a sign the housing market is shifting back toward a more balanced dynamic between buyers and sellers. Rock-bottom mortgage rates in the first two years of the pandemic armed homebuyers with more purchasing power, which fueled bidding wars, driving the median sale price for previously occupied U.S. homes 42% higher between 2020 and 2022.
"Essentially, the price reductions suggest far more normalcy in the housing market than we've seen over the last couple of years," Hale said.
The share of properties that had their listing price lowered peaked in October 2018 at 21.7%. It got nearly as high as that — 21.5% — in October 2022.
Last year, the percentage of home listings that had their asking price lowered jumped to 18.9% in October, as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to Freddie Mac.
Mortgage rates eased in December amid expectations that inflation has cooled enough for the Federal Reserve begin cutting its key short term rate as soon as this spring. Those expectations were dampened following stronger-than-expected reports on inflation and the economy this year, which led to a rise in mortgage rates through most of February.
That's put pressure on sellers to scale back their asking price in order to "meet buyers where they are," Hale said.
That pressure could ease if, as many economists expect, mortgage rates decline this year.
- In:
- Inflation
veryGood! (59175)
Related
- Trump suggestion that Egypt, Jordan absorb Palestinians from Gaza draws rejections, confusion
- Nearly 17 million animals died in wildfires in Brazil's wetlands last year
- 18 Baby Shower Gifts From Amazon That New Parents Will Go (Goo-Goo) Gaga Over
- Kate Spade 24-Hour Flash Deal: This $360 Backpack Is on Sale for $89 and It Comes in 6 Colors
- Arkansas State Police probe death of woman found after officer
- Mark Zuckerberg's first tweet in over a decade is playful jab at Elon Musk's Twitter
- The Sun Belt is making a big play for the hot electric vehicle market
- Russia won't say where Wagner boss Yevgeny Prigozhin is, but photos purportedly show his raided home
- Jamie Foxx reps say actor was hit in face by a glass at birthday dinner, needed stitches
- These 4 charts explain why the stakes are so high at the U.N. climate summit
Ranking
- Could Bill Belichick, Robert Kraft reunite? Maybe in Pro Football Hall of Fame's 2026 class
- The 2021 Hurricane Season Wrapped
- In Beijing, Yellen raises concerns over Chinese actions against U.S. businesses
- Get Softer-Than-Soft Skin and Save 50% On Josie Maran Whipped Argan Oil Body Butter
- Jamie Foxx reps say actor was hit in face by a glass at birthday dinner, needed stitches
- The Arctic has a new record high temperature, according to the U.N.
- How decades of disinformation about fossil fuels halted U.S. climate policy
- Pence says Trump administration would have kept U.S. troops in Afghanistan despite withdrawal deal with Taliban
Recommendation
The city of Chicago is ordered to pay nearly $80M for a police chase that killed a 10
U.S. and China announce surprise climate agreement at COP26 summit
Fire kills 6 at Italian retirement home in Milan
Drought is forcing farmers in Colorado to make tough choices
Dick Vitale announces he is cancer free: 'Santa Claus came early'
Virginia officials defend response to snowy gridlock on I-95
Jeremy Renner Enjoys Family Trip to Six Flags Amusement Park 3 Months After Snowplow Accident
The U.N. chief warns that reliance on fossil fuels is pushing the world to the brink