Pending home contracts fell for the sixth month in a row, while more sellers report dropping their home price.
Realtor.com® found that contracts fell 3.9% year over year in April, when the median listing price hit $425,000 and mortgage rates surpassed 5%. As many buyers continue to struggle with affordability and limited inventory, some sellers are finding they are needing to drop their original listing price to attract a signed contract.
Redfin reported that 19.1% of sellers dropped their home price in the four weeks leading up to May 22, suggesting a market slowdown may happen into the summer. Additionally, people searching Google for houses for sale fell 13.1% year over year and mortgage applications were down 16% from the same period last year.
However, the median asking price of newly listed homes rose 18% year over year, as prices continue to consecutively hit record highs. It’s unclear if the inventory shortage will continue to plague the market, as new listings were only down 0.9% year over year. However, active listings fell 13% from the same time last year, but that is the smallest drop in more than two years.
Homes are still moving quickly off the market though, 55% of homes accepted an offer within the first two weeks, up 2% year over year and 40% accepted an offer within one week of their home hitting the market. Homes were only on the market for a median of 15 days, a record low, down four days year over year. And a record-high of 57% of homes sold for over listing, up 7% year over year. Additionally, the average sale-to-list price ratio was 102.8%, meaning how close homes sold to their listing price, an increase of 1.2% year over year.