Housing Market: New Home Listings Fall to Record Low 15% as Sellers Become Increasingly Hesitant
Soaring mortgage rates and economic uncertainty have been slowing down the housing market. It’s gotten to the point that would-be buyers are hesitant to list their homes, as prices have started to decrease. With few new listings, buyers’ bargaining power is reaching its limit, and those who still list are increasingly pricing to meet buyers where they are, according to a Redfin survey.
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In the four weeks ending August 21, new listings of homes for sale fell 15%, the biggest annual decline since the start of the pandemic, Redfin noted, adding that “the dearth of homeowners putting their homes up for sale is partly a reaction to reduced demand and falling prices.”
In turn, sellers are being pushed to price lower to be in line with fewer demands. Now, the median asking price of newly listed homes dropped 5% from the record high set in May, and sale prices dropped 6% from the record high set in June.
“Sellers are coming to terms with the fact that volatile mortgage rates have dampened demand. Some sellers are pricing lower, and some homeowners are staying put because they’re nervous they won’t get a good offer or they’re hesitant to give up their low mortgage rate,” Redfin Economics Research Lead Chen Zhao, said in a press release. “Because the number of homes for sale is no longer rising, buyers’ newfound bargaining power is reaching its limit. It’s worth noting that early demand indicators such as tours and requests for help from agents are elevated from their June lows and remain steady. So there is a pool of interested buyers out there, but sellers need to price fairly to attract them. If more sellers and buyers find that middle ground on price, we could see sales strengthen a bit.”
The trend is also reflected in the number of mortgage applications, which decreased 1.2% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 19.
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“Mortgage applications continued to remain at a 22-year low, held down by significantly reduced refinancing demand and weak home purchase activity, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said in the release.
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