Record Price Cuts Hit Housing Market as High Mortgage Rates Slash Buyer Demand
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Sellers are cutting prices at record levels as mortgage rates remain high and buyer demand falls. Nearly 7% of listings lowered prices in October, a new 11-year record.
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High mortgage rates have forced some sellers to cut prices to offset higher monthly payments for buyers. Rates need to fall for housing market activity to pick up substantially.
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Redfin says a homebuyer now needs to earn $114,627 to afford a home, up 15% from last year. This prices out many prospective buyers.
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Realtors and economists expect home prices to continue dropping through the end of 2023 as demand remains weak.
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A Moody's analyst predicts home prices will fall about 4.5% over the next two years despite low inventory, due to high rates curbing demand.