Real EstateRising mortgage rates cause more home sellers to lower...

Rising mortgage rates cause more home sellers to lower asking prices


Several new reports from real estate companies suggest buyers may be starting to get a break in this red-hot housing market. More listings are coming up for sale, and some sellers are lowering their asking prices. 

The number of new listings last week jumped 8% from a year ago, according to Realtor.com. This follows four straight weeks of annual declines in new listings. The total amount of active inventory for sale is still down 13% from a year ago, but it may be on track, given the rise in new listings, to surpass year-ago levels by this summer. New listings tend to peak in May.

Prices, however, are still well above year-ago levels. Higher mortgage rates are also making houses less affordable. The average borrower is now paying about 38% more than they would have for the same home a year ago on a monthly payment, according to Realtor.com.

For some buyers, general inflation and related mortgage rate hikes mean less budget flexibility to pursue freshly listed homes. For those who can afford to persist, a silver lining could be relatively less competition for more for sale home options, which could lead to some relief from relentless home price momentum.

As more supply comes on the market and mortgage rates rise sharply, sellers appear to be coming back to Earth, at least a little. About 12% of homes for sale had a price drop during the four weeks ending April 3. That’s up from 9% a year ago, according to Redfin. The rate of sellers dropping their asking prices is now growing faster each month than it has since August.

“Price drops are still rare, but the fact that they are becoming more frequent is one clear sign that the housing market is cooling,” said Daryl Fairweather, Redfin’s chief economist. “It goes to show that there’s a limit to sellers’ power. There is still way more demand than supply, and buyers are still sweating, but sellers can no longer overprice their home and still expect buyers to clamor at their door.”

Buyers are sweating because the average rate on the 30-year fixed mortgage, which has been rising since January, really took off in the past few weeks. It surpassed 5% earlier this week, according to Mortgage News Daily. Consumers are more pessimistic about the housing market, according to a monthly survey from Fannie Mae, and especially about mortgage rates.

The share of consumers who expect mortgage rates to rise further increased to 69% from 67% in March. More consumers also said they believe home prices will continue to rise.

“If consumer pessimism toward homebuying conditions continues, and the recent mortgage rate increases are sustained, then we expect to see an even greater cooling of the housing market than previously forecast,” wrote Mark Palim, vice president and deputy chief economist at Fannie Mae.



Original Source Link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Inflation’s slow grind down | Financial Times

This article is an on-site version of our Unhedged newsletter. Sign up here to get the newsletter sent...

Super Mario Sounds Exactly Like Chris Pratt—and That’s Fine

When Chris Pratt teased his upcoming role as gaming’s most iconic character, Mario, he called it “unlike anything...

Arrow Electronics Hosts Cycling Challenge To Raise Funds for Martin House Children’s Hospice

For the second year in a row, Arrow Electronics employees in the United Kingdom raised funds for Martin...

Another Trump Senate Candidate Has Been Condemned By The People Who Knew Him Best

Arizona Republican Senate candidate Blake Masters has been condemned by 75 of his classmates, teachers,...

A metal ion bath may make fibers stronger than spider silk

Super strong artificial silk? That’s so metal. Giving revamped silkworm silk a metallic bath may make the strands both...

Must Read

UK government bond tumult ripples into US and European markets

Turmoil in UK government debt has sent shockwaves...

U.S. Judge Dismisses Mexico Lawsuit Against Gun Manufacturers

MEXICO CITY (AP) — A U.S. federal judge...
- Advertisement -

You might also likeRELATED
Recommended to you