: ‘We’re seeing buyers backing out’: Sellers slash home prices in response to weakening housing market

by | Oct 21, 2022 | Stock Market

Here’s a chart that speaks a thousand words about the state of the real-estate market right now. The chart above, part of a new report by real-estate brokerage Redfin
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on the property market, reveals how home sellers are adjusting to the new normal of 7% mortgage rates. The chart says that 7.9% of homes for sale on the market each week had their prices slashed — and that’s a record high.

That’s compared to just 4% of homes having their prices reduced each week over the same period a year ago. Redfin’s data goes back to 2015. The company averaged out the share of listings which saw a price cut over four weeks, to smoothen out any outliers. Taylor Marr, deputy chief economist at Redfin, added that looking over a bigger time period, i.e. a month, the company’s data shows that a quarter of homes right now are dropping prices. “We have never been this high,” Marr told MarketWatch in an interview. Unlike buyers, who are much more sensitive to rising mortgage rates, “sellers are just slow to react to the changes in demand… they set prices based on where they think the market is [and] are often reluctant to set their prices too low,” Marr said. So for sellers, prices are a little stickier, he added, and slower to come down. But even if it took a while, it’s finally happening. After all, mortgage rates are at multi-decade highs, with the 30-year trending steadily above 7% as of Friday afternoon, according to Mortgage News Daily. And that’s likely to go up even more, as the 10-year Treasury note
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