Across the U.S., 21 percent of home sellers dropped their asking prices in July — the highest share since Redfin began tracking the metric in 2012, according to the company. Shares of homes with prices falling in July compared to a year ago increased in 94 of the 97 metro areas surveyed. The trend was at its worst in “housing booms” like Boise, Idaho, where a whopping 69.7% of homes for sale undercut listing prices in July. Other overheated markets included Denver, with prices down 58%, and Salt Lake City, with a 54.8% share of the cuts. “Individual home sellers and builders both rushed to drop their prices in the early summer, largely because they had unrealistic expectations for both price and timelines,” said Shauna Pendleton, who is based at Redfin. “They were priced really high because their neighbor’s house was overpriced a few months ago and they expected to get a lot of offers the first weekend because they heard stories about it,” Pendleton added. Salt Lake City is one of the most overheated markets.Getty Images The US housing market has cooled significantly in recent months as the Federal Reserve tightens monetary policy to combat runaway inflation. Mortgage rates have risen more than 5%, almost twice as high as in January. Rising mortgage rates have exacerbated an affordability crisis for would-be buyers dealing with the effects of inflation on their budgets as well as high house prices. The trend has dampened demand and left sellers with little choice but to lower their expectations. Other metro areas with a share of home price cuts of more than 50% included Tacoma, Wash. Tampa, Florida? Sacramento, California; Indianapolis and Phoenix, according to Redfin. Overall, home sales fell 19.3% in July from a year earlier, Redfin data showed. Activity has reached its lowest point since the start of the COVID-19 pandemic. Sales have been down for six straight months. The housing market is in the midst of a recession.Getty Images/iStockphoto “Some prospective homebuyers have been sidelined because they have been priced out of the market. Others were wary of possible declines in home values in the near future,” the company said in a statement. As The Post reported, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients last week that a market downturn “is nowhere near yet, especially for prices.” “The bottom is still a long way off, given the extent to which demand has been crushed by rising interest rates. the required monthly mortgage payment for a new buyer of an existing single-family home is no longer increasing, but was still up 51% year-over-year in July,” Shepherdson said in a note to clients. Credit rating agency Fitch also warned of an impending downturn, predicting that prices could eventually fall by as much as 15% in the event of a major housing slump.
