Several new reports from real estate companies suggest that buyers may be starting to get a breather in this housing market. More listings are being offered for sale, and some sellers are lowering their order prices.
The number of new listings last week jumped 8% from a year ago, according to Realtor.com. This comes after four consecutive weeks of annual declines in new listings. The total amount of active inventory for sale is still down 13% from last year, but it may be on track, given the rise in new listings, to surpass last year’s levels by this summer. New listings tend to peak in May.
However, prices are still well above last year’s levels. Mortgage rates rise Make homes less expensive. According to Realtor.com, the average borrower is now paying about 38% more than they would have paid for the same home a year ago on a monthly payment.
For some buyers, general inflation and rises associated with mortgage rates mean less budget flexibility to pursue newly listed homes. For those who can afford to go, the silver lining could be relatively less competition for more home selling options, which could bring some relief from the continued momentum of home prices.
With the market oversupplied and mortgage rates rising sharply, it looks like sellers are getting back on the ground, at least a bit. About 12% of homes for sale saw a price drop during the four weeks ending April 3. That’s up from 9% a year ago, according to Redfin. The rate at which sellers are dropping their asking prices is now growing at a faster rate every month than it has been since August.
“Price drops are still rare, but the fact that they are becoming more frequent is a clear sign that the housing market is cooling,” said Daryl Fairweather, chief economist at Redfin. “It shows that there is a limit to the power of sellers. There is still more demand than supply, buyers are still sweating, but sellers can no longer overprice their homes and still expect buyers to scream at their doors.”
Buyers are sweating because the average 30-year fixed-rate mortgage, which has been on the rise since January, has already kicked in in the past few weeks. It crossed 5% earlier this week, According to the daily mortgage news. Consumers are more pessimistic about the housing market, according to a monthly survey from Fannie Mae, especially about mortgage rates.
The share of consumers expecting a rise in mortgage rates rose to 69% from 67% in March. More consumers also said they believe home prices will continue to rise.
“If consumer pessimism about home-buying conditions persists, and recent increases in the mortgage rate persist, we expect to see a further slowdown in the housing market than previously anticipated,” wrote Mark Balim, Vice President and Deputy Chief Economist at Fannie Mae.
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