Inflation, high mortgage rates leading to fewer sales and softening home prices nationwide
Based on a new report from national property broker Redfin, the median sale price for U.S. homes came down 0.7% from its record-breaking June 2022 peak during the four weeks ending July 10, 2022.
Sellers' asking prices also came down 3% from their May peak as the share of homes with price drops hit another new high. Home supply posted its first year-over-year increase since August 2019 as pending sales continued to slide. These changes in the housing market can be attributed to buyers reaching their limit on costs--not just of homes and mortgages, but also food, transportation and energy.
"Inflation and high mortgage rates are taking a bite out of homebuyer budgets," said Redfin Chief Economist Daryl Fairweather. "Few people are able to afford homes costing 50% more than just two years ago in some areas, so homes are beginning to pile up on the market. As a result, prices are starting to come down from their all-time highs. We expect this environment of reduced competition and declining home prices to continue for at least the next several months."
Leading indicators of homebuying activity:
Key housing market takeaways for 400+ U.S. metro areas: