Gone, evidently, are the halcyon days of the pandemic-era housing boom in which homes sold for thousands of dollars more than the asking price, as Redfin reported that the average sale-to-list-price ratio fell below 100% for the first time since March 2021.
The average home sold for less than its list price during the four-week period that ended on Aug. 28, per Redfin listings. The average sale-to-list price ratio for the period was 99.8%, down from 101.4% one year earlier. Only 37% of homes sold for more than list price, down from 50% in the same period in 2021. On average, 7.5% of homes for sale each week saw their prices decline— a record level, although unchanged from the previous four-week period.
The shift came as the mortgage rate rollercoaster hit another spike, with 30-year mortgage rates rising to 5.66% for the week ending Sept. 1 — their highest point since June.
Despite the price easing, however, homebuyer demand remains tempered, due in large part to the aforementioned jump in rates. Searches for “homes for sale” on Google were down 26% annually for the week ending Aug. 27. Meanwhile, the seasonally adjusted Redfin Homebuyer Demand Index, which tracks home-tour requests and other homebuying services from Redfin agents, was down 16% year over year.
“While the cooldown appears to be tapering off, there are signs that there is more room for the market to ease,” Redfin chief economist Daryl Fairweather said. “The post-Labor Day slowdown will likely be a little more intense this year than in previous years when the market was super tight. Expect homes to linger on the market, which may lead to another small uptick in the share of sellers lowering their prices.
“Homebuyers’ budgets are increasingly stretched thin by rising rates and ongoing inflation, so sellers need to make their homes and their prices attractive to get buyers’ attention during this busy time of year.”