After soaring to a peak high of $450,000 in June, home prices are finally beginning to fall, giving long-delayed homebuyers an upper hand when it comes to negotiation in a cooling seller’s market. National prices dropped from $449,000 in July to $435,000 in August, the largest month-to-month decline in data history dating back to 2016, according to a new report by Realtor.com.
August home prices are still up 14.2% year-over-year, but a seasonal slowdown paired with a market reset will cause prices to fall at a more rapid pace in the final months of 2022.
“It’s the time of year when prices typically slow,” explains Realtor.com Chief Economist Danielle Hale. “We usually see a peak in median listing prices in June, and then prices come down as we move toward the end of the year.”
“This year, in addition to the usual seasonal cooling, we’re seeing a shift in the balance of supply and demand,” explains Hale. “After years of demand vastly outstripping supply—forcing buyers who wanted to find a home to bid up prices—supply has increased. And that means price growth has cooled.”
This means home shoppers may gain the upper hand when it comes to negotiation and a final sales price. It may even drive down median list prices further in the coming months and extinguish the red-hot seller’s market once and for all.
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