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More home retailers are lowering offer prices as rising mortgage rates and inflation have slowed competition in the home market.
Some cities have significantly lower prices than others. Boise, Idaho took the lead in June, with 61.5% of sellers lowering asking prices, according to a new report from real estate agent Redfin.
Boise was one of the hottest pandemic markets, as the culture of being able to work from anywhere has allowed thousands of people to flee from more expensive markets such as San Francisco and Los Angeles. A year ago, about a quarter of Boise sellers were lowering prices.
Top 10 markets with lower offer prices:
- Boise, Idaho: 61.5%
- Denver, Colorado: 55.1%
- Salt Lake City, Utah: 51.6%
- Tacoma, WA: 49.5%
- Grand Rapids, Michigan: 49.3%
- Sacramento, CA: 48.7%
- Seattle, WA: 46.3%
- Portland, Oregon: 45.7%
- Tampa, Florida: 44.5%
- Indianapolis, Indiana: 44.1%
Many of these markets saw significant price increases during the pandemic, but they were simply not sustainable due to rising interest rates. Average interest rates on 30-year fixed mortgages have nearly doubled earlier this year. Therefore, the cost of ownership is quite high.
Boise has confirmed that home prices have risen by more than 60% from pre-coronavirus levels. According to the S & P Case-Shiller Index, home prices have risen about 39% nationwide since March 2020, when Covid was declared a pandemic.
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“Rising mortgage rates and the potential for recession have led future buyers of popular destinations to press the pause button, large job center workers who rely on their stock portfolio for down payments. It also has a big impact on us, “says Sheharyar. Bokhari, Senior Economist at Redfin.
Competition is chilling as supply in the market is increasing. Inventories hit record lows during the pandemic, but now they are finally increasing as homes sit longer and demand recedes. According to Realtor.com, active inventory last week increased by 28% compared to the same week a year ago.
The real estate market remains undersupply compared to 2019, but is heading in the right direction. Still, housing isn’t much more affordable than it was before the pandemic. According to Realtor.com, for households with $ 75,000 in income, only 23% of homes currently on the market are affordable, down from 50% in stock in 2018.
George Ratiu, Senior Economist at Realtor.com, said: ..