According to a Redfin report, 12 percent of the homes for sale had price drops during the four weeks ending April 3, up from 9 percent a year earlier and the highest share since early December. The rate of sellers dropping their prices is growing faster month-over-month than it has since August. HOWEVER, this is highly dependent on your location. Look at the Columbia MO housing market (March 2022.)
That’s another sign that the early 2022 housing frenzy is starting to ease as mortgage rates approach 5 percent, according to Redfin.
“Price drops are still rare, but the fact that they are becoming more frequent is one clear sign that the housing market is cooling,” Redfin Chief Economist Daryl Fairweather said in a release. “It goes to show that there’s a limit to sellers’ power. There is still way more demand than supply, and buyers are still sweating, but sellers can no longer overprice their home and still expect buyers to clamor at their door. That’s because higher mortgage rates are eating into homebuyers’ budgets.
“As the cooldown continues to set in, it is important that sellers price their home carefully,” she said. “Homes that sit on the market for several days have a scarlet letter that makes them more difficult to sell. Buyers should be wary of bidding significantly over asking on newly listed homes and take a closer look at the homes that have been on the market for more than a week.”
Other indicators signaling that homebuyer demand is softening include year-to-date growth in home tours measured by ShowingTime falling 3 percent compared with last year. Also, mortgage purchase applications fell 9 percent from last year, and Redfin’s seasonally adjusted homebuyer demand index has been flat for the past month.
“The slowdown over the last two weeks has felt significant,” Seattle-area Redfin real estate agent Dee Heyerdahl said. “Usually, April is when the spring homebuying and selling market begins to heat up, but this year things are cooling down a bit instead. Listings that a month ago would have had a dozen interested buyers touring in a single day now see less action than that in a whole week. Potential sellers are deciding to hold off in the midst of the market uncertainty. Homebuyers are telling us that they’re disengaging from the market because they’ve been priced out of the market by both rapidly rising home prices and rapidly rising mortgage rates. That said, the market still feels very hot, and as things slow down it just means homes might only sell for a few thousand over asking price instead of hundreds of thousands and multiple offers will mean three or four instead of 30 or 40.”