Rising mortgage rates are hampering the first few weeks of the spring market, according to a Redfin Homes Report released Thursday. The number of home sellers fell back in the four weeks to March 31, leading to the smallest annual increase in new listings in seven weeks (+8.4%).
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Rising mortgage rates are hampering the first weeks of spring markets, according to one agency Red Fin Housing Report Published Thursday.
The number of home sellers fell back in the four weeks to March 31, leading to the smallest annual gain in new listings in seven weeks (+8.4%). The slowdown in new listings inevitably leads to a slowdown in buyer activity. Family travel requests on Redfin are up 15% year-over-year, a significant slowdown from the previous year, when travel activity increased 21%.
Chen Wei | Image source: Redfin
Chen Li, director of economic research at Redfin, said that the ebb of consumers in late March was a “transient phenomenon” caused by the concentration of several religious holidays such as Easter. However, Zhao did not ignore the impact of rising mortgage rates and strong home price growth on buyer and seller activity.
The median home sales price in the United States increased by 4.7% year-on-year to $376,223, and the weekly average 30-year fixed mortgage rate increased by 7.43% year-on-year to 6.79%. Increases in median prices and average interest rates have pushed the median mortgage payment to $2,700 per month, $13 below the all-time high in October 2023.
Headwinds have produced mixed results in the nation’s 50 largest metropolitan statistical areas.
Median sales prices increased in all metros except San Antonio (-0.3%), and 74% of the 50 largest markets saw an increase in pending amounts, led by San Jose (+30.5%) and San Francisco ( +24.9 %) Leading Way. However, new listings fell in 74% of markets, with Atlanta (-9.6%) and Newark (-8.9%) being the hardest hit.
Still, Zhao is hopeful about the coming months as inflation continues to move in the right direction.
“Daily average mortgage rates increased this week due to some disappointing economic news,” she said. “But if upcoming jobs and inflation reports show the economy is moving in the right direction, the Fed may confirm they will cut interest rates in June, lowering mortgage rates.”
She added: “If new listings return to pre-Easter momentum, house price growth is likely to slow as spring approaches.”
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