The average weekly share of homes for sale with a price drop passed 4% for the first time since September 2020, signaling a cool-down in the hyper-competitive market, according to a new report from Redfin (covering the four-week period ending July 11).
Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $361,700, up 0.5% from the four-week period ending July 4, but down 0.6% from the all-time high two weeks ago.
Pending home sales were up 11% year-over-year, the smallest increase since the four-week period ending July 5, 2020. Pending sales were down 11% from their 2021 peak during the four-week period ending May 30, compared to a 4% decrease over the same period in 2019.
New listings of homes for sale were up 3% from a year earlier. The number of homes being listed is in a typical seasonal decline, down 8% from the 2021 peak during the four-week period ending May 23, compared to an 11% decline over the same period in 2019.
"Asking prices are still high, but the share of listings with price drops is rising steadily and could soon reach pre-pandemic levels," said Redfin Chief Economist Daryl Fairweather. "That's an early indication that we are past the peak for this intense seller's market. Buyers may begin to regain some negotiating power on properties that have been on the market for more than a week."
Redfin found that active listings (the number of homes listed for sale at any point during the period) fell 30% from 2020—the smallest decline since the four-week period ending January 31—and have climbed 9% since their 2021 low during the four-week period ending March 7.
Buyer fatigue has been seen as a factor pushing down the competition rate, with some house hunters moving to the sidelines after repeatedly losing bidding war after bidding war, or are simply getting priced out of the market entirely.
However, 53% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 44% rate during the same period a year ago, but down 4.2 percentage points from the high point of the year, set during the four-week period ending March 28.
As bidding wars have cooled, 38% of homes that went under contract had an accepted offer within one week of hitting the market, up from 32% during the same period a year earlier, but down 5.1 percentage points from the high point of the year, set during the four-week period ending March 28.
Cash remains king in sales, as a recent Redfin analysis has found that nearly one-third (30%) of U.S. home purchases this year were paid for with all cash, up from 25.3% during all of 2020, representing the largest share since 2014, when 30.6% of homes were purchased with all cash.
Click here to view Redfin’s latest data analysis.