Median U.S. Home Listing Price Exceeds $400,000 for the First Time
Real estate costs in the U.S. continue to skyrocket, with the median listing price exceeding $400,000 for the first time, sidelining many Americans from buying homes as mortgage rates rise.
The U.S. median listing price reached a record high of $405,000 in March, according to a Realtor.com report on Thursday.
Consumers who want to purchase a home could see a reprieve soon as higher mortgage rates cause demand to level off, according to Danielle Hale, chief economist for Realtor.com. As well, homebuilders are helping to increase supply by ramping up production to almost a 16-year high, she said.
“Despite the $405,000 price tag, March data reveals we are starting to take some steps towards a more balanced market,” Hale said. “Buyer demand is moderating in the face of high costs and we’re beginning to see more homeowners take price cuts on their listings and overall inventory declines lessen in response.”
While some buyers want to take advantage of current mortgage rates before they increase further, other consumers could find more choices during the summer, she said.
“Assuming all these factors and new construction hold steady, we could begin to see inventory increases this summer – welcome news for buyers who have endured pandemic home shopping and can continue their journey despite higher buying costs,” she said.
The median list price increased by 13.5% year-over-year, which is a faster rate than is typical for this time of year, but remains the same annual growth rate as last month, Hale said.
Current data demonstrate that the real estate market is beginning to soften, and sellers are responding to it, she said.
The share of listed homes that had their price lowered rose to 6% in March compared with 5.8% a year earlier, the report said. This level is nine percentage points below typical 2017 to 2019 levels, it said.
Twenty-five of the largest 50 metro areas reported an increasing share of price reductions in March, compared to only 18 in February, according to the report.
The inventory of homes listed for sale in March dipped 18.9% from last year, a smaller decline than the 24.5% drop in February, the report said.
The number of pending listings also declined by 7.4% compared to last March, an indication of softening demand, the report said. The slowdown could be the result of rising listing prices and increasing interest rates, according to the report.