Nearly one in five home sellers slashed the asking price for their homes in August in an effort to lure a buyer as the market rapidly cools.
The share of homes for sale that reduced their asking price jumped to 19.4% in August, according to a monthly report by Realtor.com published Thursday. That number was up from 11% in the same month one year earlier.
“Competition continued to cool in August, with listing price trends indicating that home shoppers are tightening their purse strings,” said Danielle Hale, chief economist for Realtor.com.
After hitting a record high of $450,000 in June, the median national home price for active listings sank to $435,000 in August.
The median price’s 3.1% decrease compared to July was the largest month-over-month drop on record since Realtor.com began tracking the metric in 2016.
A residential real estate market that surged to record highs during the COVID-19 pandemic has slowed considerably in the last few months. Surging mortgage rates have exacerbated an affordability crisis for prospective homebuyers, pushing many to the sidelines until conditions improve.
The average 30-year fixed mortgage rate was 5.66% as of Thursday, according to Freddie Mac. Mortgages are nearly 3 percentage points higher than they were one year ago, with rates climbing steadily as the Federal Reserve tightens monetary policy.
While the jump in sellers cutting their asking price was significant compared to last year, Realtor.com’s report noted the numbers were “close to typical 2017 to 2019 levels,” before the pandemic-era housing boom.
The cooldown has alleviated one source of pressure on would-be homebuyers by boosting inventory levels, with active listings jumping 26.6% in August compared to the same month one year ago.
The typical US home for sale spent 42 days on the market last month, an increase of five days from last year and the first year-over-year uptick of any kind since June 2020.
“For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce,” said Hale. She noted that higher mortgage rates were also a factor in the slowdown.
As The Post reported earlier this week, the volume of mortgage applications remains at a multi-decade low. Purchase applications have declined for eight of the last nine weeks, according to the Mortgage Bankers Association.