Highest share of price drops since November 2022

June 2, 2024

Price Drops Hit Highest Level in 18 Months As High Rates Dampen Buyer Demand

May 30, 2024 by Dana Anderson

More home sellers are cutting their asking price, suggesting sale-price growth could soften in the coming months. But this week, the median sale price rose to another record high, pricing out some buyers.

Nationwide, 6.4% of home sellers cut their asking price during the four weeks ending May 26, on average, the highest share since November 2022. The median asking price dropped roughly $3,000 to $416,623 in the last week, the first decline in six months. Additionally, for-sale supply is growing more stale: Age of inventory (the number of days active listings have been on the market) started rising year over year in May for the first time in eight months, hitting a median of 46 days. Together, those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3% year over year to another record high, though sale prices are a lagging indicator because they’re typically negotiated at least a month before a deal closes.

Buyers did get a modicum of relief on housing costs this week. The typical U.S. homebuyer’s monthly housing payment dropped to $2,812, its lowest level in six weeks. Payments are declining because even though sale prices remain at all-time highs, mortgage rates have come down from their peak: The weekly average mortgage rate is 6.94%, the first time it has dipped below 7% since early April. (It’s worth noting that the reprieve in rates may be short-lived; daily average rates started increasing this week after a string of disappointing treasury auctions.)

High costs are dampening demand. Pending sales are down 3.4% year over year, on par with declines over the last month, and mortgage-purchase applications are sitting near their lowest level in six months. Low inventory is another factor pushing down sales. Even though 7.8% more new listings hit the market than during the same period last year, listing growth has been losing momentum for the last few months, leaving buyers with fewer homes to choose from than there typically are in May.

“The market is slower than usual, but well-maintained properties listed for under a million dollars still get multiple offers,” said Christine Chang, a Redfin Premier agent in the Bay Area. “People who are buying right now are typically doing so because they’re having a baby or looking for a more family friendly 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. 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.”

For Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	7.34% (May 29)	Up from 6.99% 2 weeks earlier, but down from a 5-month high of 7.52% 5 weeks earlier	Up from 6.95%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.94% (week ending May 23)	Down from 5-month high of 7.22% 3 weeks earlier	Up from 6.57%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Declined 1% from a week earlier (as of week ending May 24)	Down 10%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Down 7% from a month earlier to lowest level in 3 months (as of week ending May 23)	Down 12%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 10% from the start of the year (as of May 27)	At this time last year, it was up 12% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Unchanged from a month earlier (as of May 28)	Down 14%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending May 26, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending May 26, 2024	Year-over-year change	Notes
Median sale price	$390,613	4.3%	All-time high
Median asking price	$416,623	6%
Median monthly mortgage payment	$2,812 at a 6.94% mortgage rate	7.3%	$58 below all-time high set during the 4 weeks ending April 28
Pending sales	89,218	-3.4%
New listings	101,172	7.8%
Active listings	912,320	15.2%	Highest level since Dec. 2022
Months of supply	3.2	+0.5 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks	44.7%	Down from 49%
Median days on market	32	+3 days
Share of homes sold above list price	31.8%	Down from 34%
Share of homes with a price drop	6.4%	+2 pts.	Highest level since Nov. 2022
Average sale-to-list price ratio	99.5%	-0.2 pts.

Metro-level highlights: Four weeks ending May 26, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Anaheim, CA (19.3%) Detroit (16.4%) Nassau County, NY (12.5%) San Jose, CA (12.4%) West Palm Beach, FL (12.4%)	Fort Worth, TX (-0.4%) San Antonio, TX (-0.3%)	Decreased in 2 metros
Pending sales	San Jose, CA (13.7%) San Francisco (7.2%) Columbus, OH (6.5%) San Diego (5.3%) Anaheim, CA (4.2%)	Houston (-15.1%) West Palm Beach, FL (-14.4%) Atlanta (-14.1%) Fort Lauderdale, FL (-12.5%) Orlando (-11.5%)	Increased in 13 metros
New listings	San Jose, CA (34.5%) Phoenix (24.7%) San Diego (21%) Oakland, CA (20.1%) Montgomery County, PA (19.5%)	Chicago (-10%) Atlanta (-9.4%) Newark, NJ (-6.4%) Detroit (-3.4%) Warren, MI (-1.9%)	Decreased in 8 metros