Home sales fell 3.8% in June, the biggest drop in months. (iStock)
Sellers are listing homes at record high prices, but buyers aren’t interested. High interest rates and high prices are keeping buyers away. That means buyers who are still looking have more room to maneuver than they’ve had in years.
Pending home sales fell 3.8% in the first half of June, the biggest drop in about four months. According to Redfin data,As homes languish on the market and listings remain listed online for more than a month, some sellers are lowering their prices.
“A few years ago, we wouldn’t have told a seller that they needed to repaint, fix the furnace and update the roof before putting their home on the market. But now we encourage them to make the house as clean as possible,” said de Bourgeois, the agent with Redfin Premier in Detroit.
“Buyers are still out there and are willing to pay the current high prices, but only if the home is in really good condition. They don’t want to spend the extra money on painting or new appliances,” Bourgeois said.
Sales are also declining due to fewer available homes. Technically, new listings are up 7.7% year over year, but that’s far lower than normal for this time of year, the Redfin report explains.
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Big cities struggle to attract home buyers
Cities that were once hot real estate spots have become a bit too popular in recent years, with soaring home prices deterring homebuyers. Los Angeles and Philadelphia are two of the big cities seeing a decline in homebuying.
In Los Angeles County, Home sales are at record lowsMore than 107,000 homes have sold in Los Angeles County in the past 24 months, the slowest sales pace since 1988, and the ninth consecutive month with the lowest number of sales on record.
Homes aren’t selling as quickly as they used to, largely due to rising home prices nationwide: Only 14 percent of households in the county are eligible to buy homes currently for sale.
Philadelphia homebuyers have also lost a lot of their purchasing power in recent years. It decreased by about 65% Housing prices have risen 2.83 times between 1970 and 2022, making it difficult to purchase a home.
For perspective, the average home price in Philadelphia in the 1970s was $10,600, but in 2022 it’s $215,000.
If you’re looking to buy a home in today’s market, you can visit Credible to compare interest rates and lenders and explore your mortgage options.
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Another Pennsylvania city ranks as one of the most affordable markets
Despite Philadelphia’s high home prices, another major city in Pennsylvania boasts the most affordable housing prices: Pittsburgh, where the median home price is $202,454. According to ZillowThis works out to a typical monthly mortgage payment of about $1,053.
Outside of Pennsylvania, Jackson, Mississippi, ranks second on Zillow’s list of most affordable places to buy a home, with typical home prices under $200,000, the average being just over $185,000, and the average mortgage payment being $964.
Coming in third is Syracuse, New York, one of the more affordable cities in the Northeast, where the median home price is $212,404, and buyers often spend about 23% of their income on mortgage payments.
Ohio and Kansas rounded out the next three on Zillow’s list, with the median home price in Ohio just under $200,000 and in Kansas just a little above that.
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