Sellers Drop Their Asking Prices as Affordability Crisis Widens

As mortgage rates exceed 5% and more homebuyers are priced out of a heated housing market, home sellers are beginning to drop their asking prices, a clear sign of an approaching slowdown, experts say. Roughly 12% of all homes for sale experienced a price drop during the four weeks ending April 3 compared to 9% just a year earlier, and the monthly rate of sellers lowering their prices is moving at its fastest pace since August, Redfin reports.

Other market trends signal a similar shift in housing demand, especially in pricey coastal markets with a 3% drop in year-to-date home tours compared with the same time last year. Mortgage purchase applications also fell 9% year-over-year and were down 3% from the week before, revealing the impacts of the Fed’s inflation control methods on an already volatile housing market.

“The slowdown over the last two weeks has felt significant,” said Seattle-area Redfin real estate agent Dee Heyerdahl. “Usually April is when the spring homebuying and selling market begins to heat up, but this year things are cooling down a bit instead. Listings that a month ago would have had a dozen interested buyers touring in a single day now see less action than that in a whole week. Potential sellers are deciding to hold off in the midst of the market uncertainty. 

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