According to national property broker Redfin, the median US home price fell 1.2% in February 2023, marking the first year-over-year decline since 2012. Sellers have been forced to lower their expectations because high mortgage rates have put homebuyer demand on ice.

“Buyers are struggling because higher interest rates have increased the cost of homeownership, and sellers are struggling because they’re still adjusting to the fact that their home won’t sell for what their neighbour’s did a year ago,” said Andrew Vallejo, a Redfin real estate agent in Austin, Texas, which has seen one of the largest home-price declines in the country. “The drop in prices is bringing more house hunters off the side-lines, but they’re in no rush because rates are high and they have the upper hand”, he added.

Just under half (45%) of homes that went under contract in February did so within two weeks, down from 60% one year earlier, as demand from house hunters slowed but also supply dried up. New listings in February were at the lowest level on record aside from the start of the pandemic. They fell 23% year-on-year and were down 3.5% from the prior month.