Redfin reports first year-over-year decline in median asking price since March.
Source: Original report
The U.S. housing market showed signs of cooling this week as the median home asking price fell for the first time since March, according to a new report from Redfin. This shift, along with other key indicators, suggests that buyers may soon see some relief from the intense competition and high prices that have dominated the market in recent years.
A Turning Point in Pricing
The median U.S. asking price of a home for sale declined by 0.3% year over year, marking the first decrease since March 2026. This decline comes as home-sale price momentum slows, with the median sale price rising just 0.5% year over year—the smallest increase since March.
"This is a significant shift," said Redfin economists. "While a 0.3% decline may seem modest, it reflects a broader trend of price adjustments as sellers adapt to changing market conditions."
Mortgage Rates Remain a Key Factor
Mortgage rates continue to play a crucial role in the housing market. The weekly average mortgage rate reached a three-year peak of 7.4% on October 8, though it has since eased slightly to 7.45% as of October 14. High mortgage rates, combined with still-rising home prices, have pushed the typical homebuyer's monthly payment to $2,777—the highest level on record except for the previous week.
Demand at Record Lows
Pending home sales, a leading indicator of future home sales, ticked up 1.5% from the previous week but remain near their lowest level since records began in 2021. This includes the final months of 2023, when mortgage rates approached 8%. Pending sales dropped in every one of the most populous U.S. metro areas.
More Price Drops and Growing Supply
As sellers adjust to the cooling market, more are dropping their asking prices. Currently, 22% of home sellers with active listings have cut their prices, which is an increase from 20.9% a year earlier and represents the highest level in Redfin's records. Meanwhile, housing supply is growing, albeit slowly, with new listings inching up 0.4% week over week and the total number of homes for sale rising 0.8%.
What to Watch Next
The housing market is at a critical juncture. Buyers may find more negotiating power as price drops become more common, but high mortgage rates and monthly payments remain significant hurdles. Sellers will need to adjust their expectations as the market shifts toward a more balanced state. Economists will be watching closely to see if this trend continues or if external factors, such as mortgage rate fluctuations, alter the trajectory.
