The share of U.S. home sellers who have dropped their asking prices grew to 15% in the four weeks ending May 1, according to new data from Redfin.
That’s the highest share in six months and was up from 9% during the same period last year, representing the largest yearly jump since Redfin began tracking the metric in 2015. The median asking price for a newly listed home remains up and grew by 16% annually to reach $408,458, an all-time high, per Redfin’s data. But sellers have started to lower prices in response to declining demand caused by a variety of factors, including still-high home prices and rising interest rates that are contributing to the erosion of affordability.
Fewer people are searching Google for “homes for sale,” with searches for this term down 7% year over year during the week ending April 30. Touring activity from the first week of January through May 1 also was down, dropping by 24 percentage points from the same period in 2021, per home-tour technology company ShowingTime.
Additionally, the seasonally adjusted Redfin Homebuyer Demand Index, which tracks requests for home tours and other homebuying services from Redfin agents, was down 1% annually in the week ending May 1. This backtrack was part of a 10% decline over the past four weeks, while in the same period last year, the index decreased by only 1%.
While sellers are increasingly reacting to ebbing demand by adjusting their price expectations, Redfin experts caution homebuyers not to count their chickens just yet. Inventory remains low and sellers are still outnumbered by prospective buyers, so homes continue to sell quickly.
In the four-week period ending May 1, 56% of homes that went under contract had an accepted offer within the first two weeks on the market, while 42% had an accepted offer within one week. These percentages are up year over year from 54% and 41%, respectively. Homes sold during the four-week period ending May 1 were on the market for a median of 15.5 days, a record low.
Homes also continue to be sold for more than their asking prices. A record 56% of homes sold above list price during this same period, up from 47% one year prior. And the average home sold for 2.8% above list price, an all-time high.
“Homebuyers continue to be squeezed in nearly every way possible, which is causing some to take a step back from the market,” said Daryl Fairweather, Redfin’s chief economist. “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.
“So, even though price drops are becoming more common, most homes are still selling above asking price and in record time.”