U.S. homes selling at slowest pace in 6 years; Austin market continues cooldown

U.S. homes are selling at their slowest pace in six years. That’s according to a recent report from online real estate brokerage Redfin.

Here are excerpts from a Redfin news article by Lily Katz:

• “The typical home that went under contract in March sat on the market for 47 days. Homes sold over twice that fast during the pandemic homebuying frenzy.” (Homes also sat on the market longer in the Austin region, in March — an average of 78 days, nine days more than in March 2024, per the Austin Board of Realtors).

• “Homes are taking longer to sell because many are overpriced and demand is sluggish. Plus, sellers are competing with each other—the supply of homes for sale hit a five-year high in March.”

• “Meanwhile, competition between buyers is declining; only 27% of buyers paid more than the list price — the lowest March share since 2020 — and home prices grew at the slowest pace in a year and a half.”

• “March marked five years since the coronavirus was declared a pandemic, and many U.S. housing metrics are returning to the levels seen just before or during the early days of the pandemic — when the housing market was moving slowly. Gone are the days of 2021 and 2022, when most home sellers were getting multiple offers and fetching more than their asking price.”

• The supply of homes for sale is rising, in part because “many homeowners can no longer hold out for lower mortgage rates; eventually, people have to move due to factors like a new job or a divorce. Meanwhile, demand is sluggish because economic uncertainty and high homebuying costs are giving house hunters pause.”

Home Prices Are Increasing at the Slowest Pace in a Year and a Half

“The good news for buyers is that because supply is climbing, price growth is slowing,” Redfin’s Katz wrote.

The U.S. median home-sale price in March was $431,057, up 2.5% from a year earlier. That’s the slowest growth since September 2023.

(In the five-county Austin region, the median home-sales price in March was basically flat year-over-year, with half of the houses selling for more than $446,000 and half for less, according to the Austin Board of Realtors).

• “When supply is on the rise, sellers lose negotiating power because buyers have more options to choose from,” the Redfin article said. “Still, many sellers are trying to fetch high prices. List prices have been growing faster than sale prices, and Redfin agents report that sellers are overpricing their homes, causing them to sit on the market.”

• “There’s a growing disconnect between what sellers think they can get for their homes and the direction the market is actually moving,” said Redfin Senior Economist Elijah de la Campa. “Tariff fears and widespread economic uncertainty are making homebuyers nervous, so if sellers don’t lower their price expectations, home sales may slow in the coming months.”

Austin-area market mirrors national picture

Eldon Rude, a longtime Central Texas housing industry analyst, said similar trends are evident in the Austin-area market, as the Statesman reported April 18.

More: Austin-area housing market cooldown continues amid growing economic headwinds

Rude said that “as the likelihood of tariffs being imposed increased during March, uncertainty began to set in for both homebuyers and sellers. Evidence of this change in sentiment was the fact the overall measure of consumer confidence as measured the Conference Board fell sharply from 98.3 in February to 92.9 in March.”

• “There’s so much uncertainty right now regarding the impact tariffs will have on the local economy and our housing market, which makes any forecast of what conditions will be like over the next three to six months very tricky,” Rude, principal of Austin-based research and consulting firm 360° Real Estate Analytics, said in a recent email. “That said, financial confidence over the ability to repay a mortgage is critical to the health of the housing market, and that confidence is being tested in the current environment.

• “Although the number of active home listings always increases during the spring and summer months, listings are now well above the number of we saw in the spring of 2024. With listing totals likely to increase in the summer months, and the current level of uncertainty over the direction of the U.S. and local economy, I anticipate sellers in some parts of the Austin area will have to be increasingly aggressive on pricing to sell their homes.”

This article originally appeared on Austin American-Statesman: U.S., Austin-area housing markets face headwinds from multiple fronts