Home prices have fallen for the first time in 2022 at the fastest pace recorded since 2022, according to a recent report.
Across the United States, 6.4% of home sellers issued a price cut in the month leading up to May 26. That is the highest percentage of price slashes recorded since November 2022. At the time, the rate for the 30-year fixed mortgage soared past 7% for the first time in over 20 years, per a Redfin report.
The report also noted that the median asking price for homes dropped roughly $3,000 to $416,623 in the last week, the first decline recorded in six months. It is also the first decline recorded so far in 2024, though home prices are still 4% higher than last year.
Furthermore, the number of days active listings have stayed on the market rose in May to a median of 46 days, marking the first time an increase was recorded in eight months.
Redfin noted that, together, the metrics suggest "sale-price growth could soften in the coming months."
Falling Home Prices Give Homeowners a Relief
With home prices falling, buyers and homeowners are getting some relief from the country's housing affordability crisis. Monthly housing payments dropped to $2,812, the lowest level recorded in six weeks.
That being said, the high cost of homes still makes it difficult for sellers to sell their homes. Pending sales fell 3.4% year-over-year. Mortgage-purchase applications also fell to 138.4 from a previous 140, according to Investing.com, citing the Purchase Index from the Mortgage Bankers Association of America.
Apart from high home prices, another factor pushing down sales is the lack of housing supply in the market. This leaves buyers with fewer homes to choose from.
Despite the housing market's current condition, Redfin Premier agent Christine Chang still recommends that buyers be open-minded and consider purchasing a home.
"My advice for those buyers is to be open-minded: Consider single-family homes that are a bit outdated but don't need major renovations, and/or homes in lesser-known, non-trendy neighborhoods. That type of home tends to sit on the market longer, and buyers may be able to avoid competition and get a home for asking price instead of engaging in a bidding war," Chang said. "Buyers who can get by with less space should consider a condo; they're relatively unpopular right now and many are going under asking price."
