(Bloomberg) -- The average US home is selling below its asking price for the first time in nearly 18 months, according to data from online brokerage Redfin.
The shift is largely because of surging mortgage rates, which have dented affordability and kept many would-be buyers on the sidelines, forcing sellers to accept lower prices. The average sale-to-list price ratio fell to 99.8% in the four-week period ended Aug. 28. It hasn’t been below 100% since March 2021, Redfin said.
That comes as the supply of homes for sale grew at a record rate in July, and as sales of new US homes slipped to the slowest pace since early 2016. Mortgage rates hit the highest level since June this week amid expectations for further rate hikes from the Federal Reserve, and are approaching their 2022 highs.
The pandemic housing boom was marked by bidding wars that pushed prices higher as buyers gobbled up the limited supply of available homes. And while US real estate has cooled so far this year, there are some signs the market is beginning to level out, at least for now. The share of listings with a price drop was unchanged from the prior four-week period at 7.5%, according to Redfin’s report.
“While the cooldown appears to be tapering off, there are signs that there is more room for the market to ease,” chief economist Daryl Fairweather said in a statement. “The post-Labor Day slowdown will likely be a little more intense this year than in previous years when the market was super tight.”
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