U.S. Home-Sale Prices Fall for First Time Since 2023

For three years, home prices only knew one direction. In October they finally took a small step back: the median U.S. sale price dipped 0.4% from a year earlier to $388,634, Redfin said Tuesday, the first annual decline since May 2023 ^[1].

Two months earlier, prices had still been up 2.5% ^[1].

How we got here

• Mortgage rates averaged 7.33% in October, a three-year high, up from 6.86% in September, per Redfin ^[1].
• Pending sales slid 3.6% month over month, and roughly 15% of pending deals fell out of contract ^[1].
• About 61% of October sales closed under the original list price, and 36% had at least one price cut, a Redfin record ^[1].
• A typical buyer's monthly payment hit $2,004 last month by Zillow's estimate, up 12.8% in a year, CNBC reported ^[2].

But sellers are not panicking. Realtor.com data cited by CNBC shows the share of listings with a price cut held near 20%, about where it was a year ago, while new listings fell 7.5% ^[2]. Inventory is still 6.6% short of pre-pandemic norms, CNBC said ^[2]. Prices also rose in more than half of the 50 biggest metros, Redfin noted ^[1].

What it means for you

Leverage now sits with buyers in many metros, especially in condos, where Redfin counted 123% more sellers than buyers in September ^[3]. Redfin's Chen Zhao said buyers should treat a list price as "a starting point" ^[1]. On a $388,634 home, by our math, every 1% you negotiate off saves about $3,900, and asking the seller to cover closing costs or a rate buydown can be worth more.

Zoom out

Total homes for sale reached their highest level since early 2020, Redfin said ^[1]. With rates above 7%, prices are adjusting slowly to fewer buyers rather than collapsing.