Mortgage News May 17, 2023
A recent report from Redfin has highlighted that new listings of homes for sale have fallen 22.4% nationwide in the four weeks leading up to April 23, marking one of the most significant declines since the start of the pandemic. The trend appears to be a result of homeowners wanting to retain their low mortgage rates and struggling to find another home to purchase.
The current lack of inventory is resulting in a significant decline in the total number of homes for sale, leading some homes to sell much more quickly. Almost half of the homes on the market are now selling within two weeks, a higher portion than seen in nearly a year. This trend is happening even as elevated mortgage rates are causing some potential homebuyers to hold off, resulting in a 17% year-over-year decrease in pending home sales.
The limited inventory is creating fierce competition among buyers for the few homes available, resulting in home prices not falling any further. The U.S. median sale price is down 2.8% year-over-year, with some parts of the country seeing a more significant decline in prices than others. For example, prices in Austin, TX, are down by 13.7% YoY, Oakland, CA by 13.5%, and San Francisco by 12.3%.
Redfin’s Deputy Chief Economist, Taylor Marr, pointed out that although high mortgage rates have discouraged some homebuyers, there are still more people in the market looking to buy a home than there are available homes for sale. This is positive news for homeowners who want or need to sell their homes, particularly in regions where new listings are scarce. Marr noted that sellers who set reasonable prices for their homes are receiving multiple offers, which suggests that the current home prices and values are being upheld. Marr believes that this trend is promising for the future of the housing market, as it may eventually encourage more prospective sellers to put their homes up for sale.
In some areas, demand is far outpacing supply. Phoenix Redfin agent Heather Mahmood-Corley has seen new listings slow in recent weeks, with buyers eagerly bidding on the homes that do come on the market. On the other hand, in Seattle, both prices and pending sales have experienced a greater decline than the national average. However, local Redfin agent Shoshana Godwin has noted an increase in demand this month, with some buyers hoping to secure a deal while prices for desirable homes continue to rise due to limited inventory.
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