Borrowers are paying more for their mortgages than ever before, and this spring's homebuying market is anything but normal.
The median monthly housing payment hit an all-time high of $2,894 during the four weeks ending May 5, a new report from Redfin revealed. That’s 14% higher year-over-year.
“The market is a mixed bag, with high mortgage rates causing some listings to sit longer than I would expect in the springtime and high prices holding steady,” said David Palmer, a Redfin Premier agent in Seattle. “Sellers can rest assured that there are plenty of motivated buyers who are jumping into the market now; they finally understand that rates aren’t going to plummet anytime soon. Those buyers are the people who are moving because they need to. They’re relocating for a new job, going through a divorce, or growing their family. So even though some of my listings are taking longer to sell than they would in a typical spring market, they are selling eventually.”
Between April and May, home prices rose 4.5% to their own record high, as new listings rose 9% YOY, the smallest increase in three months (with the exception of the four weeks ending March 31, when there was an artificially small decline due to Easter).
Many would-be sellers backed off when rates rose throughout April, and pending home sales dropped by 3% YOY, the biggest decline in two months.
It’s also not your typical spring home-buying market, which usually features fierce competition among buyers and sellers. Just 30% of homes sold above asking price, down 32% YOY and flat from the week prior.
Adjusting to these conditions, 6.2% of home sellers dropped their asking price, the highest share since November and up from 4.3% a year ago.
Perhaps the only signal that things might improve comes in the form of mortgage-purchase applications, which increased 2% from the week prior.
