Record-Low New Listings Recorded For Early June

Mortgage News June 16, 2023

According to a recent report by Redfin, the scarcity of new homes being listed for sale has resulted in a 25% year-over-year decline, reaching the lowest level for early June ever recorded. This drop in new listings, combined with high home prices and interest rates, has had a negative impact on overall home sales nationwide. The report also highlights that the total inventory of homes on the market has decreased by 5% compared to the previous year.

The scarcity of available homes on the market is primarily attributed to the elevated mortgage rates, reaching a daily average of 6.94% on June 7, which is close to the highest level seen in the past twenty years. The majority of homeowners currently enjoy mortgage rates below 6%, which acts as a deterrent for them to list their homes for sale and give up their comparatively low rates.

Due to the limited inventory, the decline in national home prices has been relatively modest. The typical price of homes in the United States has decreased by 1.6% compared to the previous year. This decline is the smallest observed in the past three months and is only half the magnitude of the 3.2% drop experienced in April, which was the most significant decrease in at least ten years.

While certain regions in the country are still experiencing increases in home prices, the median asking price in the United States remains unchanged from the previous year after a series of declines in recent weeks. This suggests that home sellers in some metropolitan areas are recognizing the opportunity to secure favorable prices for their properties.

Aside from driving up prices, the limited number of available listings is also affecting the number of home purchases. Pending home sales have dropped by 17%, extending a trend of double-digit declines over the past year. However, there is a continued strong demand for homes at the early stage of the buying process, as indicated by Redfin’s Homebuyer Demand Index, which is close to its highest level in a year. This suggests that potential homebuyers are actively searching for properties and may be inclined to make offers once mortgage rates decrease or more homes become available for sale.

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