It’s a hot seller’s market in much of the country, despite few sales, as homebuyer demand is outpacing supply nationally.
Even though sales are down by double digits, limited new listings are making it feel like a seller’s market in parts of the country, according to a new Redfin report.
The report found even though elevated mortgage rates continue to dampen demand, low inventory has homes selling fast in parts of the country.
New listings continue to be in short supply.
During the four weeks ended April 2, new listings fell 21.8% from last year — one of the biggest drops since the start of the pandemic, marking an “unseasonal early-spring decline in the total number of homes for sale,” according to the report.
And with many homeowners choosing to stay put because they don’t want to give up their low mortgage rate, buyers are acting fast on homes as they hit the market. That quick action has nearly half of all homes on the market going under contract within two weeks, up about 25% from January.
“It would take 2.8 months for today’s supply of for-sale homes to sell at homebuyers’ current consumption rate, the shortest time since September,” the report said.
Despite quickened sales, pending home sales are still down, falling 19% year over year.
Redfin deputy chief economist Taylor Marr says elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers.
“Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow,” said Marr. “Today’s serious homebuyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly. The lack of homes hitting the market explains why the market is moving fast even though sales are still down. The lack of new listings is also one reason why sales are down: Buyers can’t buy if sellers don’t want to sell.”
Thirty-year mortgage rates fell to 6.28% for the week ending April 6, the fourth week in a row of declines. The daily average was 6.18% on April 6.
Mortgage applications declined 4% during the week ended March 31, and purchase applications rose 8% from the prior month but were down 35% from a year earlier.
The lower rate brought the average monthly mortgage payment on a median-priced home to $2,508, down slightly from March’s peak, but up 15% from a year ago.
There’s no doubt homebuyer demand is on the rise. During the week ended April 6, Redfin found Google searches for “homes for sale” were up 44% from their December low but down 20% from last year.
In the four weeks ended April 2, active listings rose 12.3% from last year, marking the smallest increase in five months. Meanwhile, new listings fell 21.8% from last year.
The median asking price of a home rose 0.9% from 2022 to $391,851. Meanwhile, the median sale price fell for the seventh week in a row by 2.1% to $361,796.