It’s a new dawn for the housing market as the power dynamics shift back into the hands of buyers.
Sellers are dropping the listing prices on their homes as they look to get rid of their properties, according to a Realtor.com report. Last month, 19.3 percent of listings had sellers drop their prices, the highest level in five years and August total since 2018.
“A growing number of homes on the market and rising share of price cuts indicate that today’s housing market isn’t as heavily tipped toward sellers as it has been in recent years,” Realtor.com chief economist Danielle Hale said in a statement.
Part of sellers’ diminishing leverage is due to improvement in listing inventory. The number of homes for sale was up 36.2 percent year-over-year in August, the 10th consecutive month with an inventory bump. More homes for sale means less competition and less pricing power for sellers.
Inventory improved across all four regions tracked in the report. The biggest bump was in the South, where active home listings were up 46 percent. Nowhere was the increase bigger than in Tampa, which saw a staggering 91.1 percent increase in active listings.
Newly listed homes declined by less than 1 percent from a year earlier, narrowly ending a nine-month streak of increased new home listings on an annual basis. Hale cited volatile mortgage rates as a reason for the dip.
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Buyers also stand to benefit from declining mortgage rates, which could drop even further if the Federal Reserve delivers on interest rates it’s teased ahead of its meeting slated for this month. Mortgage rates in August averaged 6.35 percent, the lowest in 18 months.
The median home price in August fell almost $10,000 to $429,995, according to Realtor.com’s report — but the median price per square foot actually increased 2.3 percent year-over-year as smaller homes took a larger share of listing inventory.