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Metros in Colorado, Utah and Idaho had the largest share of sellers as house prices fell in June

A significant number of sellers in the United States are cutting prices as high mortgage rates and fears of a potential recession keep many potential buyers at bay.

A recent report from Redfin said more than 25% of home sellers in three-quarters of the metros tracked by the brokerage nationwide lowered their asking prices in June.

In some areas, more than 60% of sellers lowered their prices, which the report said has “become a common feature of the cooling housing market, especially in places that were popular with buyers in the early part of the year.” pandemic “.

A For Sale sign is posted outside a home in Pittsburgh, Pennsylvania on January 4, 2019. (AP Photo/Keith Srakocic, File/AP Newsroom)

Thirty-year mortgage rates are much higher than they were at the start of the year, which “has really eaten away at homebuyers’ budgets,” said Redfin chief economist Daryl Fairweather. , at FOX Business.

According to mortgage buyer Freddie Mac, 30-year fixed mortgage rates averaged 5.54% this week, down from 5.51% a week ago.

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Some homebuyers have had to abandon the buy market altogether and face the rental market, while others are still in the game but “are much less willing to bid on the asking price or deal overpriced homes,” Fairweather added.

As buyers are “more nervous”, sellers make concessions and lower prices. Fairweather said sellers no longer have the luxury of choosing between dozens of offers as they would have had earlier this year.

Boise, Idaho, had the largest share of buyers, 61.5%, who lowered their asking prices, according to the analysis. That’s up from 25.7% in June 2021.

for sale sign in front of the building

A For Sale sign is displayed in front of a home in Washington, DC on March 14, 2022. (Stefani Reynolds/AFP via Getty Images/Getty Images)

Denver, Colorado, and Salt Lake City, Utah, were not far behind with 55.1% and 51.6% of sellers lowering their prices, according to the report.

Almost half of the sellers in Tacoma, Washington; Grand Rapids, Michigan and Sacramento, California also lowered their prices.

Boise, Salt Lake City, Sacramento and Tampa were popular hotspots between summer 2020 and March 2022, “as homebuyers moved out of expensive coastal employment hubs, taking advantage of low mortgage rates and remote working “, according to Redfin.

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However, their popularity worked against them.

“Their popularity has led to fierce competition for a limited supply of homes for sale, driving up prices and making them unaffordable for many buyers,” the report continues.

For example, the typical Boise home sold for $550,000 in May, up 60% from two years ago, according to the report. Similarly, prices for a typical home in Sacramento rose 44% to $610,000.

“Consumer sentiment is also making homebuyers more reluctant to stretch their budgets,” Fairweather added.

Not only are homebuyers worried about inflation continuing to rise, but they’re also worried about what would happen if the economy fell into a recession and unemployment rates rose, according to Fairweather.

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“Homebuyers don’t want to find themselves in a situation where they can’t pay their mortgage because they don’t have the income they thought they had,” Fairweather added.

Here are the top ten metros that saw the biggest share of seller declinesping their prices in June:

  1. Boise, Idaho: 61.5%
  2. Denver, Colorado: 55.1%
  3. Salt Lake City, Utah: 51.6%
  4. Tacoma, WA: 49.5%
  5. Grand Rapids, Michigan: 49.3%
  6. Sacramento, California: 48.7%
  7. Seattle, Washington: 46.3%
  8. Portland, OR: 45.7%
  9. Tampa, Florida: 44.5%
  10. Indianapolis, Indiana: 44.1%
Mary Cashion

The author Mary Cashion