A new level of “weird” has entered the housing market, or so says Redfin. According to its latest housing market trend report, home prices are up 1%, yet mortgage rates have hit 6.29%. The result? Reduced buying power. Plus, new listings have taken a hit.
When mortgage rates climb so high, prices normally come down, Redfin experts say. But with way fewer homes coming on the market, buyers are not getting much relief.
“There has been a lot of talk of a ‘new normal,’ but what’s happening in the housing market feels more like a ‘new weird,’” said Redfin Deputy Chief Economist Taylor Marr. “The impact of the Fed’s inflation-curbing strategy is seen clearest in the housing market as prospective buyers take a big step back, slowing sales. But since the vast majority of homeowners who might consider moving have a mortgage rate far below current levels, there’s very little new supply hitting the market.”
Other leading indicators in the trends report showed:
- Fewer people searched for “homes for sale” on Google. Searches during the week ending September 17 were down 33% from a year earlier.
- The seasonally-adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—was down 15% year over year.
- Touring activity as of September 18 was down 13% from the start of the year. There was a 12% increase this time last year, according to home tour technology company ShowingTime.
Also, in the four-week period ending September 18, the median home sale price was $371,850. That’s up 8% year over year. The median asking price of newly listed homes increased 9% year over year to $381,250, according to the report.