More and more home sellers are dropping their asking prices this spring. But hopeful homebuyers looking for relief in the red-hot housing market shouldn’t celebrate just yet.
The four-week period ending on May 1 saw 15% of home sellers drop their asking prices, according to a recent report from the real estate brokerage Redfin. That's a major uptick from the same period last year, when 9% of home sellers dropped their list prices.
For many buyers sitting on the sidelines waiting for prices to fall, this might seem like great news. Homes have been selling at record speeds, and bidding wars that push home prices well above asking are more common than ever. So an increase in sellers dropping their prices would be a boon for buyers — if it weren’t for the fact that many sellers are backing out of the market, too.
“Unfortunately for buyers hoping to find a deal as competition cools, sellers are pulling back even faster, which is keeping the market deep in seller’s territory,” Redfin Chief Economist Daryl Fairweather said in the report. “So even though price drops are becoming more common, most homes are still selling above asking price and in record time.”
According to Redfin’s data, the median sale price of a home is up 17% year-over-year. And in the four-week period ending May 1, 42% of homes under contract had an offer accepted within one week of listing.
Most Americans say it’s a bad time to buy a home
Soaring prices and sky-high mortgage rates are weighing heavily on Americans’ attitudes towards the housing market. A recent Gallup poll found that nearly 70% of people believe it’s a bad time to buy a house, and the same portion believes that prices will continue to rise over the next year.
That’s likely thanks in part to an ongoing shortage of housing inventory. There were 18% fewer homes for sale during the four-week period ending May 1 than during the same time last year, according to Redfin.
"Given the extremely low inventory, we're unlikely to see price declines” in the coming months, said Lawrence Yun, the National Association of Realtors’ chief economist, in a statement last week.
Yun still expects home prices to rise, but he predicts that they’ll rise at a slower pace than they have over the past year or two.