Picky homebuyers lead to record share of price reductions

As mortgage rates jump and housing inventory rises, over a quarter of all home listings dropped their price in the past month, according to Redfin.

In the four-week-period ended Sept. 16, the 26.6% of homes where the seller reduced the price was the highest percentage of listings since Redfin began tracking this data in 2010. It's a year-over-year increase of 4.8 percentage points.

“After years of strong price growth and intense competition for homes, buyers are taking advantage of the market’s easing pressure by being selective about which homes to offer on and how high to bid,” Taylor Marr, Redfin senior economist, said in a press release.

The housing supply is projected to grow over the next 18 months, giving buyers more options and leverage in negotiations.

“But there are some early signs of a softening market, and the increase in price drops may be another indicator that sellers are going to have trouble getting the prices, and the bidding wars, that they may have just months ago. Instead, many are finding their homes are sitting on the market without much interest until they start reducing their prices,” Marr continued.

On an individual level, some of the hottest housing markets had the highest year-over-year increases in price drops. Las Vegas led them all, going to 28.1% from 15.8% of listings with price drops. San Jose rose to 25.7% from 15%, Seattle went to 37.1% from 27%, and Atlanta grew to 27.9% from 18.9%.

Redfin defines a price drop as a reduction in the listing price greater than 1% and less than 50%.