The U.S. housing market is seeing remarkable shifts, as high mortgage rates and escalating home prices impact both buyers and sellers alike. A new report from Redfin has shed light on recent trends and their effects on the market.
The typical monthly mortgage payment for U.S. homebuyers was $2,605 during the four weeks ending July 30. This marks a 19% increase from the same period a year earlier and is down just $32 from the all-time high in early July. The weekly average mortgage rate is currently 6.9%, contributing to the historically high housing payments.
Active listings (the number of homes listed for sale at any point during the period) dropped 19% from a year earlier, the biggest drop since February 2022. Active listings were down slightly from a month earlier; typically, they post month-over-month increases at this time of year.
There seems to be little relief in sight as home prices continue to climb, with the median home-sale price now up 3.2% year over year, the most significant increase since November. These price hikes are driven by a mismatch between supply and demand, with the total number of homes for sale down 19%, the largest drop in a year and a half.
New data from CoreLogic reveals a slight but significant bump in annual home price growth to 1.6%, suggesting that the market may be poised for an increase in home prices. By early 2024, there is an expected resurgence in year-over-year U.S. home price appreciation of around 7% nationwide.
In particular, Miami saw the highest increase in sale prices at 12.7% YoY, followed by Cincinnati, Milwaukee, Anaheim, CA, and West Palm Beach, Fla. Conversely, declines were witnessed in Austin, Phoenix, Detroit, Las Vegas, and Fort Worth.
High mortgage rates have impacted the market in different ways, with many potential sellers staying put to hold onto relatively low rates. Meanwhile, Redfin's Homebuyer Demand Index indicates that prospective buyers are less deterred, down only 4% from a year ago.
But inventory and mortgage rates seem to be the biggest problem.
New listings of homes for sale fell 21.3% year over year. That’s a substantial decline, but the smallest in three months.
New listings declined in all metros Redfin analyzed. They fell most in Las Vegas (-43.4% YoY), Phoenix (-39.7%), Providence, R.I. (-32%), Sacramento, Calif. (-31.9%) and Oakland, Calif. (-30.7%)
Google searches for “homes for sale” were up essentially flat from a month earlier during the week ending July 29, and down about 16% from a year earlier.
Touring activity as of July 28 was up 8% from the start of the year, compared with a 5% decrease at the same time last year, according to home tour technology company ShowingTime.
