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Rising Mortgage Rates Wont Deter Home Sellers in Todays Market

By
Real Estate Agent with RE/MAX Associates RS - 0019092

This week saw a spike in mortgage rates, which should worry buyers in the midst of the competitive spring real estate market.

According to Freddie Mac, the average rate on a 30-year fixed home loan increased from 6.82% to 6.88% during the week that ended on April 11.

“Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path,” Sam Khater, Freddie Mac’s chief economist, said in a statement.

For the week ending April 6, home sellers were pushing ahead despite the ongoing rocky path of mortgage rates.

According to Realtor.com® economist Jiaya Xu's most recent analysis, "many sellers are actively listing their homes this spring, with the number of newly listed homes up by 30.1% from a year ago."

In this most recent edition of "How's the Housing Market This Week?" find out what else prospective buyers and sellers should know about the most recent real estate statistics.

Mortgage rates and ‘sticky inflation’
Over the past few months, mortgage rates have barely changed, staying between 6.6% and 7%. Rates are expected to stay high until inflation starts to move in the direction of the Federal Reserve's 2% target. (In April, the inflation rate is approximately 3.5%.)

“Sticky inflation and robust labor markets suggest that a Federal Reserve rate cut is unlikely to occur soon,” says Xu.

 

Inflation Rises To 25.8% - Ghanamma.com

 

For those looking to buy a home this spring, high mortgage rates are not good news.

“Eager buyers and sellers are hoping to see more favorable housing conditions as the spring selling season kicks off,” says Realtor.com senior economic research analyst Hannah Jones. “However, mortgage rates have offered little relief.”

Because of this, some prospective homeowners might decide to put off buying, opting to wait and see and hope for cheaper mortgage rates down the road.

Since Realtor.com started tracking this data in 2017, sellers have been lowering home prices to entice buyers who are wary of the rising housing supply. In March, the share of price reductions reached 15%, tying 2019 for the highest March share of price reductions.

“Many sellers adjusted their expectations and proceeded with their selling plans, especially with the approach of the Best Time To Sell Week,” says Xu. This week, April 14–20, is “anticipated to provide the ideal balance of housing market conditions that favor home sellers more so than any other week in the year.”  

 

 

Home prices dip slightly

For the week ending April 6, the median list price decreased by just 0.1% when compared to the same period the previous year. Although the decline is not great, any data indicating improved affordability in the current housing market is encouraging for prospective buyers. (In March, the median price of a home nationwide was $424,900.)

There is also a larger trend hinted at by this slight decline in home prices.

“This is the second week in a row where we saw negative annual price changes, and the third week of year-over-year price decline since July 2023,” Xu explains. 

Another encouraging sign for affordability was the 30.5% annual increase in the number of properties listed between $200,000 and $350,000 in March, with the South seeing the largest increase.

 

U.S. inventory of homes for sale reaches record low

 

The housing inventory surge


For the week ending April 6, buyers were treated to a feast of new listings in addition to active inventory, which is a mix of both new and old listings, rising 30.4% above levels seen a year ago. The increase indicates 22 weeks in which the number of active listings registered was higher than it was a year earlier.

“Buyers will find a broader selection of options available compared to last year,” says Xu. “However, even with recent improvements, the number of new homes for sale remains historically small.”

In fact, when compared to average levels in 2017 to 2019, the total number of properties for sale for the week ending April 6 was 37.9% fewer.

Homebuyers are picking up the pace

Buyers are browsing listing pages, attending open houses, and putting in offers despite the harsh mortgage rates.

Compared to the same period previous year, homes were off the market for one day during the week ending April 6. A median of 50 days were spent by homes in March.

While inventory has grown notably compared to last year, homes are still selling relatively quickly, likely because inventory levels are still significantly lower than pre-pandemic times,” says Xu. “More home options mean more buyers are finding what they are looking for, so homes continue to move relatively quickly.”

 

 

by realtor.com



Posted by

 

Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Thanks Christopher for the rate update!!!

This week saw a spike in mortgage rates, which should worry buyers in the midst of the competitive spring real estate market. According to Freddie Mac, the average rate on a 30-year fixed home loan increased from 6.82% to 6.88% during the week that ended on April 11.

Apr 17, 2024 03:51 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Christopher. Sellers will sell and buyers will buy as necessary to their personal needs subject to the idiocy of our political leaders. Someday the public will wake up or is that a dream? Enjoy your day.

Apr 17, 2024 04:04 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Apr 17, 2024 04:51 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

What will deter them is buyers not purchasing. Thanks for sharing and enjoy your week!

Bill Salvatore, Realtor- Arizona Elite Properties

Apr 17, 2024 05:27 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello and great information to pass on to us here in the Rain.  We can all learn from each other here in the Rain.  Can I re blog this down the line?

 

Apr 17, 2024 09:33 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Christopher Pataki  interest rates were twice as much (15%) as they are now when I purchased my home in 1981, it did not deter Buyers then, and I don't expect it to deter Buyers now.

Apr 23, 2024 02:54 PM