Price cuts surge to highest in 5 years; 22.1% of listings reduced, signaling a weakening US housing market.

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Price cuts in the U.S. housing market have surged to the highest level in five years, with 22.1% of listings in May 2024 receiving a price reduction. This figure is nearly three times higher than the pandemic low and is rising rapidly, signaling a weakening market where prices are likely to drop further in the second half of 2024.

Price cuts serve as one of the most immediate indicators of a softening market. As more sellers reduce their asking prices, it signals a growing sense of desperation. By fall, the rate of price reductions could hit 30%.

The disparities across states are stark. The most significant reductions are occurring in:

  1. Colorado – 28.6%
  2. Florida – 28.5%
  3. Tennessee – 28.4%
  4. Arizona – 28.3%
  5. Texas – 27.5%
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Not surprisingly, these are the states where inventory has also risen the most. Housing markets in cities like Phoenix, Tampa, Dallas, Austin, and Denver are experiencing skyrocketing inventory and widespread price cuts, the telltale signs of an impending market correction.

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