Home Agent New Listings Drop 12%, The Largest Decline In More Than 2 Years

New Listings Drop 12%, The Largest Decline In More Than 2 Years

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“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 Marr.

Homesellers are pulling back from listing their homes at the highest rate since the onset of the coronavirus pandemic, according to a new report released Friday.

The report, by the online brokerage Redfin, found that new listings for homes dropped 12 percent year over year during the four weeks ending Aug. 7, as sellers encountered a market marked by high mortgage rates, skittish buyers, inflation and recession fears that have seen pending home sales drop 16 percent annually.

Many homesellers are also staying put amid the high-rate environment to avoid being locked into an expensive mortgage on their new homes, the report posits.

Taylor Marr | Redfin

“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,” Redfin Deputy Chief Economist Taylor Marr said in a statement. “The good news is this is bringing balance to the market. If mortgage rates resume their downward trajectory, more buyers and sellers could get back in the game.”

Despite the decrease in new listings, overall housing supply has continued to grow — a sign that buyers are pulling back far more than sellers as competition falls dramatically from its highs during the spring and late winter, when bidding wars were all but a given on many properties.

During the week ending Aug. 11, mortgage rates inched back up to 5.22 percent after briefly falling below five percent the previous week. Rates are down slightly from their high of 5.81 percent earlier this year but up significantly from their lows of 3.11 percent at the start of 2022. High rates combined with the median home sale price of $379,089 for the week ending Aug. 7, have brought housing prices to some of their most expensive highs ever recorded, with the monthly payment on a median-priced home now at $2,290 a month, up 37 percent from a year earlier, according to Redfin’s data.

The rise in monthly payments has had a noticeable effect on consumers, with Fannie Mae’s homebuyer sentiment index showing that the number of people who believe now is a good time to purchase a home, is rapidly declining.

Doug Duncan | Fannie Mae

“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan in a press release. “Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home. Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on net, fewer consumers expect home prices to go up.

“With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop. Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.”

Email Ben Verde

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