Additional Coverage:
- Home sellers face harsh new reality as listings hit record $698B value (foxbusiness.com)
Home Prices Hit Record High, But Buyers’ Market Looms
U.S. home listing prices have reached an all-time high, but experts suggest this may signal a shift towards a buyers’ market. A recent Redfin report reveals the total value of U.S. homes surged 20.3% year-over-year, hitting a staggering $698 billion. This increase is attributed to a confluence of factors: growing inventory, slowing demand, and rising sale prices.
Redfin Chief Economist Daryl Fairweather told FOX Business that the market is on the cusp of change. With more sellers than buyers, she anticipates a shift in the coming months.
“Homes are listed at high prices, so they’re staying on the market,” Fairweather explained. “But buyers can’t afford these prices and are backing off.
High mortgage rates, insurance costs, and property taxes are also deterring buyers.” She pointed out that the rental market currently offers more attractive options for some.
Fairweather predicts that listed homes will require price reductions, and new listings will need more conservative pricing to attract offers. Otherwise, sellers face delisting or holding their properties.
“The economy is changing,” she stated. “Homeowners will have to accept the reality and lower their prices.”
Noel Roberts, founder of the real estate firm Pending, agrees. He told FOX Business that the “game is changing” for sellers as inventory grows.
Redfin reports that nationwide home listings jumped 16.7% year-over-year in April, the highest in five years. Factors include the easing mortgage rate lock-in effect and homeowners seeking to cash out amid economic uncertainty.
Homes are also lingering on the market longer, with a growing share exceeding two months.
Roberts advises sellers to adopt “smarter, more strategic playbooks,” including realistic pricing, better presentation, and early targeting of the right buyers. Meanwhile, buyers gain negotiating power.
Roberts noted, “In some submarkets, buyers finally have a real chance to secure a home with favorable terms. They’re evaluating inventory with leverage, not chasing homes in bidding wars.”
He emphasized that the current market demands discipline, not despair, and those who adapt will succeed.
The disconnect between seller expectations and buyer willingness stems from homeowners locked into low mortgage rates. Many are reluctant to sell unless they get a price that justifies giving up their low rate. Redfin data from February shows 82.8% of homeowners with mortgages had rates below 6%, while the current average 30-year fixed mortgage rate is 6.85%, according to Freddie Mac.
However, this “lock-in effect” is easing as people adjust to higher rates and face relocation needs. Fairweather believes sellers will still get good value, as the market isn’t collapsing. But those needing to move may feel pressure to lower prices to close deals.
Read More About This Story:
- Home sellers face harsh new reality as listings hit record $698B value (foxbusiness.com)