It seemed like it was a matter of time, and that time has come for single-family home prices, which dropped year-over-year for the first time since 2012, according to Redfin.
The median home-sale price declined 0.6% YoY in February. However, because mortgage rates have risen – climbing to 7.1% last Thursday – it means that homes aren’t more affordable.
The typical monthly mortgage payment for today’s homebuyer is at a record high of $2,520.
Mortgage-purchase applications have declined to their lowest level since the 1990s, the online brokerage added.
Google searches for “homes for sale” were up about 44% from the trough they hit in December during the week ending February 25, but down about 18% from a year earlier.
Redfin Deputy chief economist Taylor Marr said in prepared remarks, “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–and high rates will continue to be a hit on affordability.”
Redfin said sellers are inclined to lower their asking prices to accommodate high rates. The typical home sold for $350,246 during the four weeks ending Feb. 26.
“Many homebuyers and sellers are likely to wait at least until the summer, when rates may dip, to jump into the market,” according to Redfin’s report.
Marr added, “Prices 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.”