Inventory is tight, keeping prices high
High mortgage rates may be keeping some buyers at bay, but they’re also deterring plenty of potential sellers who are locked into low rates from just a couple years ago.
The average 30-year fixed mortgage rate hit 6.71% last week, more than double what it averaged in 2021.
New listings plunged 27% compared to last year during the four weeks ending June 25 — the largest drop since the start of the pandemic. That’s also pushed the total number of homes for sale down by 11% — the first double-digit decline in over a year.
A lack of inventory means that with fewer options for buyers to choose from, they’re snagging homes faster than they’re being listed, which in turn keeps prices afloat.
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What does this mean for Americans entering the market?
It may not be a proper housing correction, but it’s safe to say buyers and sellers alike are finding the conditions challenging.
“The market isn’t nearly as fast as it was 18 months ago, when homes were flying off the market for well over asking price, and it’s not as slow as it was six or seven months ago, when mortgage rates first shot up,” said Oakland, California Redfin Premier agent Andrea Chopp.
Trying to follow the trends on a national level can be tricky. The typical property may be going for its asking price, but June was only the second month this has occurred since August 2022. And although sale prices are dropping the most in big metros like Las Vegas and Phoenix, areas like Milwaukee and Miami are seeing a rise.
Chopp says buyers should be aware that some desirable homes are attracting several offers and selling above asking.
“And sellers should know that their home may not attract as much competition as their neighbor’s home did two years ago, but it will sell if they price it fairly and put effort into marketing,” Chopp adds.
“Things like making small repairs and staging are important again.”
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