As mortgage rates remain high, the housing market has started to slow and homes are sitting on the market longer.
Key Details
- Pending home sales and new listings have dropped to 2020 levels and mortgage-purchase applications are at the lowest levels in 25 years.
- Though listings are declining, sales are falling more rapidly, but homes are taking significantly longer to sell than earlier this year, a Redfin report finds.
- Home sellers are being forced to drop their asking prices in order to cultivate offers.
Why it’s news
Homes are frequently selling for 1% less than the original asking price. While a small drop in price, this is a dramatic difference since the summer of 2020 when homes frequently sold for thousands of dollars over the asking price.
As mortgage rates inch closer to 7%, both buyers and sellers are only entering the market out of necessity. Homes are still selling, but it may take time. Buyers can once again negotiate prices down.
Overall, it appears that interest in home buying is on a downward swing. Google searches for “homes for sale” are down 32% from the same time last year.
The Redfin report found that requests for home-buying services and requests for tours have fallen 31%. Tours themselves are down 25% just from the beginning of this year.
Applications for mortgages are down 5%.
