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Redfin Reports Buyers Are Finding More Power

Homebuyers are beginning to take back the wheel from homesellers, who have mostly prevailed over the last two years, as Redfin [1] reports that more sellers are dropping the price of their homes amid rising interest rates and growing affordability concerns. 

Pending sales in May posted their largest declines since the pandemic took hold of the economy two years ago. Inventory climbed to a new high this year, meaning that some sellers are getting lessons in the limits of their influence in a buyer-friendly market. More than one in five dropped their price, the highest rate since October 2019. 

“The sudden surge in mortgage rates led to a sudden and significant cooldown in the housing market in May,” said Redfin Economics Research Lead Chen Zhao. “However, mortgage rates are now stabilizing and homes remain in short supply, so while we do expect home-price growth rates to decline, we don’t expect prices to fall much at the national level. For homebuyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up.” 


Leading indicators of homebuying activity: 

Key housing market takeaways for 400+ U.S. metro areas:  

To view the full report, including charts and methodology, click here [2].