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Browse the siteSeptember 25 2022
Few people are choosing to buy homes with mortgage rates well above 6%; even fewer homeowners want to sell
SEATTLE -- Home prices increased 1% in the last two weeks after 11 weeks of declines as mortgage rates soared past 6%, according to a new report from Redfin, the technology-powered real estate brokerage.
The Federal Reserve's aggressive interest rate hikes have successfully cooled off homebuying demand by dramatically reducing buyers' spending power, but new listings have also taken a huge hit. Typically, when mortgage rates shoot up, the expectation is that prices come down in turn, but with so few desirable homes coming on the market, buyers are not getting much relief.
Those who do choose to list their homes have lost the upper hand their neighbors enjoyed when they sold last spring and should price accordingly. The share of home listings with a price drop reached a new high. Months of supply (active listings divided by closed sales—the lower the level, the stronger the seller's market) climbed to a 27-month high.
"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. As a result, home sale prices have picked up in recent weeks, and the typical buyer's monthly mortgage payment is just a few pumpkin spice lattes shy of its all-time high. The irony is that it may take renewed fears of a recession to bring buyers some relief in the form of lower prices."
Unless otherwise noted, this data covers the four-week period ending September 18. Redfin's weekly housing market data goes back through 2015.
View the full report, including charts, here.
About Redfin
Redfin is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.