New home listings dropped 22.4% in April, marking one of the biggest declines since the pandemic gripped the world in 2020, according to a new Redfin report.
The more than 20% dip in home listings over the four-week period ending April 23 compared to a year ago underscored how homeowners are refusing to give up the mortgage rates that they locked in before interest rates surged.
The key 30-year fixed-rate mortgage climbed for another week, averaging 6.43% as of Thursday, according to mortgage buyer Freddie Mac. That's up from the average of 6.39% from the week prior. It's also significantly higher than a year ago when the rate averaged 5.10%.
AVERAGE RATE ON LONG-TERM MORTGAGE CLIMBS FOR SECOND STRAIGHT WEEK
The scarcity of inventory is also causing homes on the market to sell quickly.
According to the real estate brokerage, almost half of all the homes on the market are selling within two weeks, the highest rate in nearly a year, even with higher mortgage rates keeping some buyers out of the market.
This dearth in homes is also keeping home prices from falling further. For instance, the U.S. median sale price was down 2.8% year over year, which is in line with the price declines seen over the last month.
However, certain parts of the country, like Austin, Texas, or Oakland, California, are seeing even larger price declines.
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"High mortgage rates have caused some homebuyers to bow out of the market. But there are still more people looking for a home than there are homes for sale," said Redfin Deputy Chief Economist Taylor Marr.
However, there's an upside to those looking to sell.
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"In certain parts of the country where new listings are especially rare, sellers who price their homes in line with the market are attracting multiple offers," Marr said.
Higher home prices and values "also bode well for the future of the housing market because they may eventually lure more prospective sellers off the sidelines," Marr added.
