New Home Buying Standards

As rates rise and expectations shift, more sellers lower asking prices

With affordability at all-time lows and buyer activity on the decline, more home sellers are recalibrating their expectations and adjusting their asking prices. In addition, with the Federal Reserve enacting a historic interest rate hike in June, the four-week period ending on June 26 saw the number of home sellers who dropped their asking price reach an all-time high.

The median asking price for newly listed homes during this period was $405,547 — still up 15% year over year but down 1.5% from the record high set during the four-week period ending May 22.

Fewer people continue to search for “homes for sale” on Google, with searches during the week ending on June 26 down 7% annually.

Touring activity as of the same date was down 3% compared to the start of the year, far below the 24% increase during the same period last year. But the seasonally adjusted Redfin Homebuyer Demand Index, a measure of requests for home tours and other homebuying services from Redfin agents, was up 7 percentage points from the week prior, despite being down 15% year over year. “Data on home tours, offers and mortgage purchase applications suggest that homebuyers have noticed the shift in power and are no longer leaving the market in droves,” Redfin chief economist Daryl Fairweather said.

Buyers coming back will provide support to the housing market, but between now and the end of year, I think the power will continue to shift towards buyers, resulting in mild price declines from month to month

By Arnie Aurellano, Website content editor, Scotsman Guide

https://www.scotsmanguide.com/browse/content/as-rates-rise-and-expectations-shift-more-sellers-dropping-asking-prices