More home sellers are dropping their asking prices as rising mortgage interest rates and inflation have eased competition in the housing market.
Some cities are seeing more price cuts than others. Boise, Idaho, took the lead in June, with 61.5% of sellers cutting their asking prices, according to a new report from Redfin, a real estate brokerage.
Boise was one of the hotter pandemic markets, as the work-from-anywhere culture prompted thousands of people to flee pricier markets like San Francisco and Los Angeles. A year ago, just about a quarter of sellers in Boise had dropped their prices.
Top 10 markets seeing cuts in asking prices:
- Boise, Idaho: 61.5%
- Denver, Colorado: 55.1%
- Salt Lake City, Utah: 51.6%
- Tacoma, Washington: 49.5%
- Grand Rapids, Michigan: 49.3%
- Sacramento, California: 48.7%
- Seattle, Washington: 46.3%
- Portland, Oregon: 45.7%
- Tampa, Florida: 44.5%
- Indianapolis, Indiana: 44.1%
Many of these markets saw massive price increases during the pandemic that were simply not sustainable as interest rates rose. The average rate on the 30-year fixed mortgage is now nearly twice what it was at the start of this year. That makes the cost of ownership considerably higher.
Boise saw its home prices soar more than 60% from pre-coronavirus levels. Nationwide, home prices are up about 39% from March 2020, when Covid-19 was declared a pandemic, according to the S&P Case-Shiller Index.