The asking prices on U.S. homes have increased to an all-time high in September, proving that homeowners are feeling optimistic despite signs of a cooling housing market.
The asking prices of newly listed homes were up 12% compared to a year ago, reaching a median value of $361,250, according to a new report from Redfin.
Throughout the entire month, asking prices have risen, underscoring a "typical late-summer seasonal uptick."
Overall, however, the housing market is continuing to show a "typical seasonal cooling."
Fewer than half of the homes on the market sold above their listing price and new listings were down 20% from their peak in 2021, according to Redfin.
Although home sellers are showing "their optimism with increasing asking prices," they should be wary of doing so in the cooling market, according to Redfin chief economist Daryl Fairweather.
Fairweather said "there are already signals from the Fed and markets that mortgage rates are starting to creep up," which will hurt potential buyers.
"The hit to affordability that comes with higher rates and higher home prices could let some steam out of the market," Fairweather said.
He cautioned that sellers need to consider the seasonal cooling trends and rising rates which will "take some affordability out of the homebuying equation."