Fewer sellers cutting prices as spring buyers return

As buyers return to the market this spring, the percentage of home sellers cutting their asking price is falling and home prices are rising, according to a Redfin report.

Just over 35% of sellers in the United States decreased their asking price in April, down from 35.6% in March on a seasonally-adjusted basis and a record high of 36.6% in August, the report found. But April's mark was up 1.1 percentage points from a year prior.

"Earlier this year and throughout much of last year, homes were lingering on the market and price drops were fairly common as sellers worked to attract buyers," said Justin Gomez, a Redfin Premier agent in Omaha, Nebraska, in a press release Tuesday. "Sellers have become more in tune with current market conditions and are pricing their homes more accurately from the start. At the same time, buyer demand has picked up significantly across nearly all price points."

Sellers who dropped their asking price last month sliced it by an average of 4%, a fairly average percent discount over the past two years, the report showed.

Similarly, home prices increased 0.2% month over month in April on a seasonally-adjusted basis and 2.1% annually, according to the Redfin Home Price Index. Prices have swelled in each of the last nine months.

"An improving labor market is buoying homebuyer demand, which is keeping home price growth afloat. Even though prices are rising, buyers still have bargaining power because they're outnumbered by sellers," said Redfin Senior Economist Asad Khan in a different press release Tuesday. "If housing demand keeps climbing, sellers may regain some of that power, causing home prices to rise further."

Where did home values increase most?

Montgomery County, Pennsylvania, saw the largest monthly hike in home prices of the 50 most populated metropolitan areas in the country at 2.5%, followed by Cleveland at a similar 2.5%, Nassau County, New York, at 1.6%, Virginia Beach, Virginia, at 1.4% and Pittsburgh at 1.1%.

Price declines were more spread out across the country, as Oakland, California, at 1.4%, Newark, New Jersey, at 1.3%, and Phoenix, at 0.7%, posted the largest decreases. Orlando, Florida, and St. Louis rounded out the top five.

While prices fell month over month in Newark, it was one of seven sellers markets in the United States last month, and just 15.1% of sellers dropped their asking price, which was only edged out by San Francisco at 13.9%.

Price cuts were most common in the Sun Belt, particularly in Texas. Nearly 60% of sellers in San Antonio decreased their asking price last month, followed by Austin, Texas, at 55.8%, Phoenix at 50.8%, Dallas at 50.5% and Tampa, Florida, at 48.2%, according to Redfin.