SEATTLE, WA — A new report from Redfin (NASDAQ: RDFN) reveals that 6.4% of home sellers across the nation reduced their asking prices during the four weeks ending May 26. This marks the highest rate of price cuts since November 2022.
For the first time in six months, the median asking price for homes dropped by roughly $3,000, settling at $416,623. Additionally, the age of inventory—measured as the typical number of days active listings remain on the market—began to rise year over year in May. The median age of inventory reached 46 days.
These changes suggest a potential softening of sale-price growth in the coming months, driven by persistent high mortgage rates deterring prospective buyers. However, despite this, the median home sale price remains up 4.3% year over year, achieving another record high. It is important to note that sale prices lag behind real-time market conditions, as they are often negotiated at least a month before closing.
Buyers experienced a slight relief in housing costs this week. The typical monthly housing payment for U.S. homebuyers decreased to $2,812, the lowest level in six weeks. This drop is attributed to a decline in mortgage rates, which fell to an average of 6.94%, the first time below 7% since early April. Nonetheless, this reprieve may be short-lived due to recent disappointing treasury auctions causing daily average rates to rise again.
High costs continue to suppress demand. Pending sales have declined by 3.4% year over year, consistent with the declines observed over the past month. Mortgage-purchase applications are also near their lowest levels in six months. Low inventory further exacerbates the issue. Despite a 7.8% increase in new listings compared to the same period last year, listing growth has slowed recently, limiting buyer choices typically available in May.
Christine Chang, a Redfin Premier agent in the Bay Area, noted, “The market is slower than usual, but well-maintained properties listed for under a million dollars still get multiple offers.” She advised buyers to consider single-family homes that are slightly outdated but do not require major renovations, or homes in less trendy neighborhoods. These properties tend to stay on the market longer, potentially allowing buyers to avoid bidding wars and secure homes at asking prices. Chang also suggested considering condos, which are currently unpopular and often sell below asking price.
These trends reflect a complex housing market where high costs and low inventory levels are shaping buying behaviors and possibly foreshadowing a slowdown in price growth.
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