Monthly payments are going up as mortgage rates continue to climb but a boost in new listings could signal a fall price cooldown.
Rates have soared to their highest level in more than two decades, sending monthly housing payments to record highs. A buyer with a $3,000 monthly budget has lost almost $40,000 in purchasing power YOY as rates rose from 6.5% to nearly 8% today, according to a new analysis from Redfin.
This is exacerbated by stagnant home inventory, which continues to trend down as stock shortages are keeping home prices high even as competition peters out. The total number of homes for sale is down 14%, Redfin noted.
The typical home sold for $371,000 during the four weeks…
New listings fell 12% during the four-week period ending August 7, the largest YOY decline since June 2020, according to recent Redfin data. Higher mortgage rates are keeping some Americans in their homes longer than they normally would be. Some homeowners are experiencing what Redfin calls “rate lock-in,” a fear of putting their home up for sale due to a low rate they nabbed during the pandemic. Others are realizing they won’t get an offer over listing price on-demand like they could last year. “Buyers are backing off due to rising housing costs and sellers are holding back because they realize they won’t get the bidding war they would have gotten six months ago,” said Redfin Deputy Chief Economist Taylor…
Total mortgage lock volumes fell 11% in May across all types of loans as rising rates kept buyers out of the market, according to Black Knight’s June Originations Market Monitor. Locks volumes fell across the spectrum, with rate/term and cash-out refinances down 9% and 13%, respectively, while purchase loan locks fell 11%. “This continues to be a challenging environment for mortgage originators,” said Scott Happ, president of Optimal Blue, a division of Black Knight. “Rate lock activity was down for the third consecutive month in June, with declines seen across all loan purpose types. Purchase mortgages – which currently account for 82% of all lock activity – fell 11% by volume from May and are now down nearly 16% from…
As affordability declines, the hot housing market is starting to see signs of cooling. In April, 15% of home sellers dropped their asking prices, a 5.9% YOY increase, Redfin reported. The increase is a six-month-high and the largest annual gain on Redfin’s record, which dates back to 2015. But buyers still outnumber sellers, so the market remains competitive and homes priced affordably continue to sell for more than asking. New listings of homes for sale were down 6% YOY and have dwindled since mid-March. The median asking price of newly listed homes rose 16% YOY to $408,458, a new all-time high. So even as more sellers are dropping prices to entice buyers, their returns are still significant. “Homebuyers continue to…
