Home prices are down 6% from the record high they reached in June, bidding wars are at their lowest level in more than two years and the typical home is finally selling for under its asking price.
In July 2022, 53 Austin homes sold for at least $100,000 above their asking price, equal to about 2% of all homes sold during the month. That’s down from 163 (4.7% of all homes sold) a month earlier and 362 (9.1%) a year earlier near the height of the pandemic homebuying frenzy.
That’s a prime example of the slowing housing market giving buyers a break after nearly two years of an ultra-competitive environment. The average 30-year fixed mortgage rate has nearly doubled from a year ago, reaching 5.66% during the week ending September 1. Though higher mortgage rates are making it even more expensive to buy a home after two years of skyrocketing prices, the silver lining is that they have thrown some water on the red-hot market.
Below, we’ve compiled some of our most recent housing-market stats illustrating the bright side of the cooling market for buyers.
Homes are still 5.9% more expensive than they were a year ago, but that’s the slowest growth rate since the start of the pandemic. And there are ways around high mortgage rates: Buyers can take out an adjustable-rate mortgage, which tend to have lower upfront rates, or they can refinance in the future.
“Sellers are losing some of their leverage, which is helping buyers, who have been through the wringer over the last two years,” said Raleigh Redfin agent Jordan Hammond. “Buyers are excited that homes are staying on the market longer and that some sellers are even dropping their prices. I’m reminding buyers that relatively high mortgage rates shouldn’t stop them if they’re serious about finding a new home, as they’re still historically low.”
The slower market also means house hunters can include contingencies like appraisals and inspections in their offers.
“Today’s buyers are negotiating, and they expect sellers to work with them,” said Bend, OR Redfin agent Angelica Webb. “If a buyer offers $35,000 below asking price and the seller counters with a $10,000 reduction, the buyer may walk away from the deal. If they ask for a repair after the inspection and the seller refuses, they may walk away. Three months ago, a buyer would have been very unlikely to make an offer under asking price or back out after an inspection. But now that there are more homes for sale and fewer buyers, they can just look at similar properties with recent price reductions or make an offer to a seller who is willing to negotiate.”
