Years of soaring home prices and sharply higher mortgage rates remain hurdles for many would-be home buyers, but new data show that they’re regaining some leverage at the negotiating table as the housing market slows.

A recent analysis of home sale data shows that on average, U.S. homes purchased during a four-week period in August sold for less than what sellers were asking. That hasn’t happened since at least March 2021.

The average sale-to-list price ratio, a measure of home sale prices relative to their asking prices, fell to 99.8% in the four weeks that ended Aug. 28. The ratio was 101.4% in the same stretch last year. Ratios above 100% indicate homes on average are selling above their asking prices.

The market appears to be going back to a place where bidding wars are unusual, and not the norm.

For most of last year and this year, fierce competition for relatively few homes on the market and rock-bottom interest rates fueled bidding wars that often led to houses selling for well above their list prices.

That remained the prevailing trend until recently, as the housing market has cooled significantly since spring as mortgage interest rates have surged sharply. Higher mortgage rates make homes less affordable, thinning out the pool of home hunters, which leaves sellers with less leverage when negotiating with buyers.

Average long-term U.S. mortgage rates jumped again this week, hitting the highest levels in almost 14 years and pushing even more would-be buyers out of the market.

Mortgage buyer Freddie Mac reported that the 30-year mortgage interest rate jumped to 5.89% from 5.66% last week. That’s the highest the long-term rate has been since November 2008, after the housing market collapse set off the Great Recession. One year ago, the rate stood at 2.88%.

That the typical home is now selling for below the asking price is a sign that the housing market is becoming a bit more balanced, or at least less skewed toward sellers.

Buyers now know that when they’re offering on a home, chances are they can get it for less than the asking price and without a competing offer.

That doesn’t mean homes aren’t still drawing multiple offers. Some 37% of homes purchased in the four-week stretch of August sold for more than their list price. But that was down from 50% a year earlier.

And buyers must still contend with rising home prices, albeit not as sharply as before.

The national median home price jumped 10.8% in July from a year earlier to $403,800, according to the National Assn. of Realtors. The median is the point at which half the homes sold for more and half for less.

Source: Alex Veiga