The median US home sale price has fallen for the first time in three years, according to Redfin data reported on October 29. The median price ticked down 0.1% year over year to $389,601 for the four weeks ending October 25, the first annual decline in the rolling measure in three years. The milestone arrives alongside other signs of a housing slowdown: pending sales hit a record low in September, mortgage rates remain above 7%, and inventory is building. Homes for sale rose 8% compared with a year ago in the latest weekly data, the highest weekly growth rate since late January, according to Realtor.com’s weekly housing trends report.
Asking prices ease too.
The median asking price fell 1.4% year over year to $414,000, Realtor.com reported, while mortgage applications rose 3.4% for the week ending October 23, although volume remains well below last year, according to the Mortgage Bankers Association. Mortgage rates dipped again this week, with Freddie Mac putting the 30-year fixed rate at 7.24% as of October 29, down from 7.32% a week earlier. The Federal Reserve voted on October 28 to leave interest rates unchanged, but new inflation data released this week may bolster investor expectations of a December rate hike, analysts said.
A slow thaw, not a crash.
The price decline is small — 0.1% — and should not be read as a market crash, analysts said. Prices remain far above pre-pandemic levels, and the persistent housing slowdown is having predictable effects: more homes sitting longer, more sellers cutting prices, and buyers gaining modest negotiating power. For sellers, the message is to price for today’s market rather than last year’s. For buyers, the combination of slightly lower prices, slightly lower rates and more choice is the best opening in months, even if affordability remains stretched by historical standards. The price dip comes with an important caveat: a 0.1% annual fall is small, and prices remain far above pre-pandemic levels. What has changed is the balance of power. With homes for sale up 8% year over year and the median asking price down 1.4% to $414,000, sellers can no longer assume a quick sale at an aspirational price, while buyers can negotiate on price, repairs and closing terms in ways that were impossible during the frenzied years. Analysts said the market is best described as a slow thaw rather than a crash — a gradual return of choice and bargaining power, not a collapse in values.
Related reading: Pending Home Sales Hit Record Low as Rates Sideline Buyers and Household Spending Rose 4.9% as Consumers Keep Spending.
