How high mortgage rates lead to fewer listings…
Until mortgage rates drop, the supply of homes for sale will remain slim.
For the week ending Sept. 2, the number of new listings sank by 8.5% compared with one year ago.
“While the number of newly listed homes increased from July to August, new home listings have once again begun to decline as is expected heading into September,” says Speianu.
Fewer sellers are listing their homes since many have low mortgage rates they’re reluctant to give up—thus locking sellers into their homes and locking buyers out. As a result, overall inventory (of both new and old listings) has also declined, lagging behind year-ago levels by 5.2%.
“In the meantime, new construction offers buyers an alternative, and new-home sales continue to climb from year-ago lows,” adds Speianu.
Home prices edge upward
As if high mortgage rates weren’t daunting enough for would-be buyers, low housing inventory has inflated home prices.
After a welcome stretch of annual price declines in June and July, median list prices rose year over year in August, to hover at a median of $435,000.
And for the week ending Sept. 2, median home prices rose by 0.2% compared with last year. But the good news is that home prices didn’t top last June’s record high of $449,000.
The bad news? Home prices are not likely to fall dramatically anytime soon.
“A renewed existing-home inventory crunch is still supporting listing prices as homebuyers find fewer opportunities compared to last year,” adds Speianu.
Why the slowing pace of home sales may speed up soon
Any sellers who can break free of their mortgage rate handcuffs will likely be rewarded with a quick home sale.
The pace of home sales has been slowing for 59 weeks, but that might soon turn a corner.
“The gap is now only two days more than the same time last year,” says Speianu. “While the demand for homes has pulled back due to affordability constraints, there are still eager home shoppers on the market browsing through a declining inventory of homes for sale.”