A recent report by Redfin shows that would-be sellers are becoming reluctant to list their homes for sale as prices begin to fall and mortgage rates remain near 6%.
The average sale price has dropped by 6% since June, going from $394,775 on June 19 to $371,125 on August 20. New listings fell 15% in the four weeks preceding August 21. Additionally, google searches for “homes for sale” dropped 16% from this time last year and new mortgage loan applications are down 21% year-over-year.
According to Redfin economist Chen Zhao:
Sellers are coming to terms with the fact that volatile mortgage rates have dampened demand. Some sellers are pricing lower, and some homeowners are staying put because they’re nervous they won’t get a good offer or they’re hesitant to give up their low mortgage rate. Because the number of homes for sale is no longer rising, buyers’ newfound bargaining power is reaching its limit. It’s worth noting that early demand indicators such as tours and requests for help from agents are elevated from their June lows and remain steady. So there is a pool of interested buyers out there, but sellers need to price fairly to attract them. If more sellers and buyers find that middle ground on price, we could see sales strengthen a bit.