More U.S. home sellers cut their listing prices in April, aiming to seal deals in the waning days of federal tax credits meant to revive housing, real estate web site Trulia.com said on Wednesday.
Prices on 22 percent of homes on the market as of May 1 had been cut at least once, up from 20 percent the prior month, San Francisco-based Trulia said in a report provided to Reuters before official release.
More than a year of tax credits up to $8,000 ended on April 30 and $1.4 trillion in mortgage-tied bond buying by the Federal Reserve to lower home loan rates finished on March 31.
As we readjust to the free market, we expect to hit turbulence in some markets, said Pete Flint, Trulia's chief executive.
Sellers slashed a total $25 billion in April from asking prices, up from $22.8 billion in March. The average discount on reduced homes held at 10 percent from the original listing.
The economy is slowly emerging from recession and housing is stabilizing after its deepest plunge since the depression.
But homeowners and potential buyers are still grappling with an unemployment rate near 10 percent. A stockpile of foreclosed properties yet to hit the market could also keep home prices from rising much, analysts say.
Earlier this year, Trulia said home sellers were being more realistic in setting asking prices, leading to fewer later price reductions.
Now that government incentives have expired, more sellers are apt to lower prices to entice buyers as the market finds its footing without the extra supports.
We won't know the true severity of the tax credit expiration until the conclusion of the peak home buying season in the summer months, said Flint. Only then will we have a better sense if the U.S. housing market can stand on its own two feet.
Qualified buyers had to sign contracts by April 30 and must close on home loans by June 30 to get the $8,000 first-time buyer credit or $6,500 repeat buyer credit.
Homes sales sped up in March and loan applications to buy houses swelled in April on a last-minute dash for the credits. How much that robs from future sales remains to be seen.
In a dozen of the top 50 cities, prices were cut on at least 30 percent of the listed properties. The previous month just five cities had as high a share of price reductions.
Prices were lowered anywhere from 6 percent to 13 percent in those 12 cities: Minneapolis, Minnesota; Milwaukee, Wisconsin; Baltimore, Maryland; Phoenix, Arizona; Dallas, Texas; Jacksonville, Florida; Mesa, Arizona; Kansas City, Missouri; Boston, Massachusetts; Columbus and Cleveland in Ohio; and Nashville, Tennessee.
Great Plains cities had some of the largest increases in the share of listed properties cutting prices. Leading the list was Omaha, Nebraska, where one quarter of the homes for sale had at least one price reduction.
Sales in cities like Omaha and Tulsa, Oklahoma, have fallen a respective 53 percent and 70 percent from a year ago, Trulia said.
Price-cutting on luxury homes listed at $2 million or more was unchanged in April from March, with an average discount of 14 percent, according to Trulia.
(Editing by Leslie Adler)