Home listings were up by 13% year over year at the end of February, according to a report from Redfin. This is the largest increase in three years.
The total inventory on the market is also holding steady. This is the first time in about nine months that the number of homes on the market hasn’t declined.
While home listings are up, so are home prices. Housing prices are still historically high, the Zillow report found. The average mortgage payment is $2,671, close to last October’s record high.
These high costs have lowered pending sales by 8%, which is the greatest decline in five months. So, while listings are up, purchases are down as buyers struggle to deal with high housing costs and record-high homeowners insurance costs.
Even though purchases are down, buyers are still looking at homes. Redfin measures the requests it gets for tours and other homebuying services through its Homebuyer Demand Index. The Index is up by 10% from a month ago and at its highest point since September.
"House hunters are out there, and competition picks up every time mortgage rates decline a bit," said Brynn Rea, a Redfin Premier agent in Spokane, Washington.
"I’m telling buyers who can afford it to look now while they have more breathing room and less competition," Rea said. "They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%."
If you think you’re ready to buy a home, consider using Credible to help you easily compare mortgage loan interest rates from multiple lenders at once.
HOMEBUYERS CONSIDERING PURCHASING TINY HOMES AND FIXER-UPPERS TO COMBAT HIGH HOME PRICES
Buyers are weary of buying, in large part due to mortgage rates rising. Rates haven’t continued dropping as the Federal Reserve and housing experts signaled they might at the end of last year. At the end of February, 30-year fixed-rate mortgages averaged 6.94%, marking the fourth week in a row rates increased, according to Freddie Mac.
While 15-year mortgages fared slightly better, dropping to an average of 6.29%, this is still higher than when rates averaged 5.89% last year.
"The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying," Freddie Mac Chief Economist Sam Khater said. "While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines."
Although interest rates are high, they’re not as high as they have been in the last few years. If you want to lower your monthly payment, consider refinance now. Use Credible's free online tool to browse different mortgage refinance lenders and see what your loan options are.
15% OF AMERICANS HAVE CO-PURCHASED A HOME WITH A NON-ROMANTIC PARTNER, EVEN MORE WOULD CONSIDER IT
No one is making out in this turbulent housing market. Buyers are struggling to find affordable homes, but sellers are also making less on the sale of their properties.
In 2023, sellers made about $121,000 in profit, on average, decreasing from $122,600 in 2022, according to an ATTOM report. Although 2023’s profits were generally high, it was the first year they decreased since 2011 when the market recovered from the 2008 recession.
"Last year certainly stood out as another very good year for home sellers across most of the United States. Typical profits of over $120,000 and margins close to 60 percent were still more than double where they stood just five years earlier," ATTOM CEO Rob Barber said.
Interest rates and other high housing-related costs aren’t helping seller profits look up for 2024.
"In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but homeownership costs that remain a serious financial burden for many households," Barber said.
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes, all without hurting your credit score.
1 IN 5 HOMEOWNERS THINKING OF SELLING IN THE NEAR FUTURE: ZILLOW
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