Redfin: Home asking prices fall for the first time in 7 months

Home prices are one of the main affordability barriers for potential homebuyers, along with mortgage rates.

Housing prices soared in 2021 and 2022, according to Redfin data. Mortgage rates dropped during the Covid-19 pandemic, and the rush to buy before rates crept back up led to heavy competition among buyers. This competition meant sellers could list their homes for more.

Even after mortgage rates rose and demand settled, many sellers continued to list high asking prices.

Sellers are slowly realizing that it isn’t 2022 anymore. Demand isn’t nearly as strong, so they can’t ask as much for their properties.

Slower home-price growth and declining asking prices could offer some relief to prospective homebuyers. And a Redfin report found that home asking prices have decreased for the first time in seven months. The national median asking price is down 0.3% year over year.

“A 0.3% dip in asking prices isn’t a crash, but it’s a sign sellers are coming to terms with the reality of the market right now,” Redfin Chief Economist Daryl Fairweather told TheStreet.

That 0.3% decrease is one piece in a larger story of what’s happening in the housing market.

Redfin data shows home prices starting to cool

A 0.3% decrease means the seasonally adjusted median asking price was $396,881 for the four-week period ending Oct. 11. This was the first decline since March 2026.

Obviously, homebuyers hope that lower asking prices will lead to lower final sales prices. Home sales prices weren’t down on Oct. 11, but they still hit a crucial point. They increased by just 0.5% year over year to $391,116. This is the slowest home sale price growth since March.

Read more: Redfin predicts major housing market change over the next 5 years as debt-income ratios shift

With asking prices declining and sale-price growth slowing, the housing market is showing some signs of relief for homebuyers.

Price cuts are becoming more common. Redfin found that 22% of sellers with active listings had reduced their asking prices, up from 20.9% a year earlier. It’s also the highest rate of price cuts in Redfin’s records.

Although the average 30-year mortgage rate is currently 7.4%, according to Freddie Mac data, slower price growth and more frequent price cuts could give prospective buyers some relief.

Redfin data shows that home listing prices are down, the rate of home price cuts is up, and final home sale prices are cooling.

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Housing supply reaches 4.2 months as demand weakens

Falling asking prices are one sign that the housing market is cooling. Another is the amount of time it would take to sell the homes currently on the market.

The national housing supply shortage is a major driver of current high home prices. When too few homes are for sale to meet demand, buyers become more competitive, pushing up prices.

Redfin’s methodology explains that a low number of months of supply typically means higher buyer demand or fewer sellers listing their homes. A higher number of months indicates that demand is low relative to the number of homes for sale. The national housing market is considered balanced when supply is 4 to 5 months.

For the period ending Oct. 11, housing supply was at 4.2 months.

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“Months of supply tells you how long it would take to sell every home currently on the market at the current pace of sales,” Fairweather told TheStreet. “At 4.2 months, it would take a little over four months to sell every home. What’s notable is that it’s up from 3.8, and that’s less about a flood of new listings and more about weak demand, since pending sales are down nearly 13% from a year ago.”

Nationally, the housing market is balancing, potentially giving buyers more room to negotiate.

“For buyers, that means more time to make a decision and a better shot at negotiating than when supply was tighter, though conditions still vary a lot from market to market,” Fairweather said.

What Redfin’s data means for homebuyers

Certain cities are experiencing bigger median sale price decreases than others. Median home sale prices may only be up 0.5% year over year, but that’s on a national level. Trends depend on your specific area. The largest annual sale price decreases are in Seattle (-6.3%), San Jose, Calif. (-4.8%), and Orlando (-3.4%).

Median sale prices are still spiking in some metro areas. Cities with the highest year-over-year median sale price spikes are San Francisco (18.1%), Detroit (9.4%), and West Palm Beach, Fla. (7.8%).

If you can comfortably afford a home now, you may have room to negotiate. “With mortgage rates near 7.4% and other homeownership costs on the rise, monthly payments are simply higher than many buyers can afford right now,” Fairweather said. “That gives buyers who can comfortably afford to buy more leverage heading into the end of the year, whether that means negotiating on price, asking for help with closing costs or getting other concessions.”

But keep your expectations realistic. Fairweather told TheStreet that buyers shouldn’t necessarily expect “dramatic discounts.” If a house is priced fairly, it will still drum up home-buyer competition.Source: Redfin Housing Market Update

Related: Zillow finds 34% of buyers cry during home-buying process

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