Homebuilders Will Have to Keep Reducing Prices to Increase Sales, But How Much More

Home sales are slowing as buyers reach their financial limits, with October 2022’s median home sales price peaking at $496,800, and since falling 16.4%. This downturn is generally associated with recessions. The drop in mortgage transaction rates is mostly tied to elevated mortgage rates nearing 7.0%, and increasing asking prices. Existing home sales have been in a decline since February 2022, despite efforts by homebuilders to stimulate the market through price reductions, offering smaller homes, and absorbing interest rate differences.