With affordability hovering around all-time lows and buyer activity on the decline, more home sellers are recalibrating their expectations and adjusting their asking prices, according to a new report from Redfin.

The median asking price of newly listed homes for sale dropped by 1.5% from this past spring’s record peak, the real estate brokerage reported. With the Federal Reserve enacting a historic interest rate hike in June, the four-week period ending on June 26 saw the number of home sellers who dropped their asking price reach an all-time high.

The median asking price for newly listed homes during this period was $405,547 — still up 15% year over year but down 1.5% from the record high set during the four-week period ending May 22.

“Homebuyers are worried about interest rates, having to go back to the office, getting laid off, and wondering if they can get a better deal by waiting out the market,” said Redfin real estate agent Caroline Loudenback, who works in the Seattle area. “On the other side, sellers are adjusting to this new reality and learning that sometimes there’s not much they can do to increase buyer interest.”

Loudenback added that prices aren’t the only reason that homes that would have received more attention a year or two ago suddenly have softened interest.

“Some more remote areas that were super popular during the pandemic are now being overlooked as buyers reconsider long commutes with high gas prices,” she said. “It’s a tricky market, and you have to pay close attention to your local sales and listings to understand what’s happening.”

Meanwhile, signs are popping up that buyers may be responding to slowing price appreciation. Fewer people continue to search for “homes for sale” on Google, with searches during the week ending June 26 down 7% annually. Touring activity as of the same date was down 3% compared to the start of the year, far below the 24% increase during the same period last year. But the seasonally adjusted Redfin Homebuyer Demand Index, a measure of requests for home tours and other homebuying services from Redfin agents, was up 7 percentage points from the week prior, despite being down 15% year over year.

“Data on home tours, offers and mortgage purchase applications suggest that homebuyers have noticed the shift in power and are no longer leaving the market in droves,” Redfin chief economist Daryl Fairweather said. “Buyers coming back will provide support to the housing market, but between now and the end of year, I think the power will continue to shift towards buyers, resulting in mild price declines from month to month.”