{"id":75896,"date":"2023-03-02T09:12:15","date_gmt":"2023-03-02T17:12:15","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=75896"},"modified":"2023-03-02T12:12:14","modified_gmt":"2023-03-02T20:12:14","slug":"housing-market-update-home-sale-prices-fall-first-time","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-update-home-sale-prices-fall-first-time\/","title":{"rendered":"Housing Market Update: Home Prices Fall Annually For First Time in a Decade As Mortgage Rates Pass 7%"},"content":{"rendered":"

The median U.S. home-sale price declined 0.6% year over year in February, marking the first annual drop since 2012\u2013but high rates mean homes aren\u2019t more affordable. The milestone comes as daily average mortgage rates hit 7.1%, dampening homebuying demand.\u00a0<\/span><\/i><\/p>\n

U.S. home-sale prices have fallen from a year earlier for the first time in more than a decade. The milestone comes as mortgage rates hitting their highest level since November sideline buyers and sellers are forced to lower their asking price to accommodate high rates. The typical U.S. home sold for $350,246 during the four weeks ending February 26, down 0.6% year over year, marking the first time prices have dropped since February 2012 (except the prior four-week period; Redfin\u2019s revised weekly data shows a 0.3% drop for the four weeks ending February 19).\u00a0<\/span><\/p>\n

But that doesn\u2019t mean homes are more affordable. The typical monthly mortgage payment for today\u2019s homebuyer is at a record high of $2,520, due to elevated mortgage rates. That could lead to a prolonged winter for the housing market. Many homebuyers and sellers are likely to wait at least until the summer, when rates may dip, to jump into the market.\u00a0<\/span><\/p>\n

\u201cPrices falling from a year ago is a milestone because it hasn\u2019t happened since the housing market was recovering from the 2008 subprime mortgage crisis. But it\u2019s not surprising and in many ways, it\u2019s welcome,\u201d said Redfin Deputy Chief Economist Taylor Marr<\/a>. \u201cHome prices skyrocketed so much over the last few years that they were likely to come down once rates rose from historic lows. Mortgage rates rising to the 7% range was the straw that broke the camel\u2019s back, dampening homebuying demand and leading to sellers asking less for their home.\u201d\u00a0<\/span><\/p>\n

\u201cPrices will probably decline a bit more in the coming months, but first-time buyers hoping to score a major deal this year are likely out of luck,\u201d Marr continued. \u201cThat\u2019s because so few homeowners are listing their homes for sale. Limited inventory and continued interest in turnkey homes in desirable neighborhoods will keep prices somewhat propped up\u2013and high rates will continue to be a hit on affordability.\u201d\u00a0<\/span><\/p>\n

Although homebuying demand is down from last year, it\u2019s still up from last fall\u2019s low point. Redfin\u2019s Homebuyer Demand Index\u2013a measure of requests for home tours and other services from Redfin agents\u2013hit its highest level since September; online searches of homes for sale are also up significantly from their trough. Pending home sales posted their smallest decline since July. But mortgage-purchase applications have declined to their lowest level since the 1990s.\u00a0<\/span><\/p>\n

Leading indicators of homebuying activity:<\/span><\/h2>\n