Home sellers across the United States, especially in areas that have seen large pandemic-induced population increases, lowered prices last month to adjust to weaker demand, according to a Redfin report published on Tuesday.
In the 108 subways tracked by the Seattle-based company, more than 10% of sellers cut their listing prices in May. The reductions were most pronounced in mid-size metropolitan areas in the West, according to the report.
The growing price declines reflect the market cooling effects of rising mortgage rates, Redfin said.
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The region that saw the largest share of price cuts was Provo, Utah, where 47.8% of homes for sale saw a price reduction in May. It was closely followed by Tacoma, Washington, with 47.7% and Denver, with 46.9%.
Salt Lake City; Sacramento, California; Boise, Idaho; Oden, Utah; Portland, Oregon; Indianapolis; and Philadelphia, round out the top 10, each with more than 40% of homes on the market receiving discounts, according to the report.
Four of those metros — Provo, Salt Lake City, Boise and Ogden — were also among the top 10 places with the most price increases during the pandemic. In Boise, home prices rose 66.7% from May 2020 to a median of $550,000 in May 2022, the largest increase among tracked metros, Redfin said.
“Some buyers can no longer afford the home they want because mortgage rates have gone up so much. There aren’t nearly as many people moving to the Boise area now that prices have skyrocketed,” Boise Redfin agent Shauna Pendleton said in the report.
“Ironically, many of Boise’s newcomers are leaving now because the quiet, slow-paced lifestyle that attracted them here no longer exists as it did before so many people moved in. These people are taking advantage of their equity to move more to affordable areas, mostly in the Midwest,” she continued.