PLANO, Texas—Nearly 20% of home listings reduced their prices last month in what might be another sign that the housing market continues to slow, one economist points out.
“According to the September Housing Trends Report, buyers still have the upper hand in the current market, especially as we approach the ‘best time to buy,’ but that power depends on where you live and how much you’re willing to pay for a home,” explained Brian Turner, president and chief economist at Meridian Economics.
Turner said price reductions are more common at the lower end of the market, while higher-priced sellers are more likely to hold firm.
“That helps explain why median prices nationally and in many metropolitan areas look steady even as buyers at more affordable price points are seeing more room to negotiate,” he said.
Buyers had more homes to choose from in September: Active listings are up 17% over last year. Nationwide, homes for sale topped one million for the fifth consecutive month. Homes spent longer on the market for the 18th straight month, with the typical home taking 62 days to sell, Turner noted.
The national median list price remained steady at $425,000, but dropped 3.6% in the West. The number of actively listed homes is up 17% compared to the same time last year, marking the 23rd consecutive month of year-on-year inventory gains.
The average rate on a 30-year U.S. mortgage ticked up for the second straight week, but rates are still at their lowest in months, Turner pointed out.
The average long-term mortgage rate rose last week to 6.44% from 6.34% the previous week, Freddie Mac reported.
“The United States is short between 3.2 million and 5.5 million homes, Freddie Mac puts the gap at roughly 3.8 million units, while the National Low Income Housing Coalition reports a shortage of more than seven million affordable and accessible units. This gap between supply and demand is the very reason for rising home prices,” Turner said.
Studies from the National Association of Home Builders show that federal, state and local regulations account for nearly 24% of the price of a new single-family home and more than 40% of the cost of new multifamily housing, Turner said.
“In each study, there's no question that housing costs are crushing families,” Turner said.