Record-high monthly mortgage payments are motivating sellers to drop asking prices to attract buyers, who are unwilling to pay a dollar more than necessary for their new home

(NASDAQ: RDFN) — Roughly one in 15 (6.5%) U.S. homes for sale had a price drop during the four weeks ending September 24, on average, up from 5.8% a month earlier–a sharp monthly increase compared to the same period in years past. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. At the same time, the median home-sale price is up 3% year over year and the typical homebuyer’s monthly payment is at a record high as mortgage rates stay stubbornly elevated, with daily average rates hitting a two-decade high on September 27.

What this means for home sellers: Pricing your home right is a delicate science. Even though demand is relatively low, you’re likely to find a buyer who will pay a fair price. That’s because there are so few homes on the market, with total inventory down 15% year over year. But with monthly payments at an all-time high, buyers are picky and they don’t want to pay a dollar more than they need to. Be careful not to price too high, or you may be forced to cut your asking price to attract a buyer. “The feeling for buyers right now is this: For the interest rate I’m paying, this home better be exactly what I want or the price better be negotiable,” said Seattle Redfin Premier agent David Palmer.

What this means for homebuyers: Negotiate with sellers. It’s still tough to win a home for under asking price, but sellers have come to terms with the fact that 7%-plus mortgage rates are giving buyers cold feet and that homes aren’t as likely to attract multiple offers. Many sellers are open to making concessions, like paying for repairs or helping fund a mortgage-rate buydown. Additionally, new listings have posted an unseasonal uptick since the beginning of September, meaning buyers have a bit more to choose from if sellers aren’t willing to negotiate. “Buyers are using things like inspection negotiations and high insurance premiums to back out of deals,” said Jacksonville Redfin Premier agent Heather Kruayai. “They’re holding a lot of the cards; today’s sellers need to concede on some details to close the deal.”

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To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-sellers-drop-asking-prices

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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