Housing Market Takes a Turn for Buyers

A for sale sign is posted in front of a home that is listed for over $1 million on April 29, 2022 in San Francisco, California. Some homes are sold below listed prices in the U.S.

A typical home in the U.S. sold for less than the asking price for the four weeks ending June 23 for the first time since 2020 in a sign that buyers could see some relief from expensive homes that have characterized the housing market over the last few years.

Buyers were able to purchase a home over the last four weeks at a 0.3 percent less than the asking price, according to the real estate platform Redfin. Last year, properties sold at the asking price while two years ago they went for 2 percent higher than the listed price.

In an apparent shift, only about one-third of homes on the market were purchased above their listed price in what Redfin said was the lowest share for the busy spring housing market season since 2020. Sellers were also slashing prices—down about 7 percent, compared to 4.7 percent last year.

The market is seeing more supply of homes than demand amid elevated prices and expensive mortgage loans. Listings are up but sales are down and homes are staying on the market longer. More than 60 percent of houses listed are spending at least a month without attracting buyers, Redfin pointed out.

Buyers have been dissuaded from entering the market partly because of high prices. The median sale price was up nearly 5 percent as of June 23 compared to a year ago to nearly $400,000. Meanwhile, mortgage rates, despite their recent deceleration, have hovered near 7 percent, elevating monthly payments.

"Buyers may get a slight respite on costs soon. The growing likelihood that homes sell below asking price, along with the high share of sellers dropping their prices, could mean sale-price growth loses momentum," Redfin noted.

Agents are suggesting that buyers and sellers should temper their expectations when looking to purchase or list homes in the current market.

"Some buyers think they can get a deal because they're hearing the market is cool, and some sellers think every home will sell for top dollar no matter the condition," Marije Kruythoff, a Los Angeles Redfin Premier agent, said in a news release.

Some of the markets that are seeing the largest median sale increases include Anaheim in California, Newark in New Jersey and West Palm Beach in Florida. The biggest declines were recorded in Texas—San Antonio, Austin, Dallas and Fort Worth.

Meanwhile, three of the five cities with the most new listings were in California—San Jose, San Diego and Anaheim. The drop in new listings were highest in Chicago, Atlanta, Detroit, Minneapolis and Portland, Redfin data showed.

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