Published by Forbes.com | July 3, 2022
The Fed’s historic mortgage rate hike put a damper on home buyer activity.
More and more, home sellers are giving in to the mounting pressure on affordability posed by June’s rapid mortgage rate hike, according to a new report from Redfin, a technology-powered real estate brokerage.
The median asking price of newly-listed homes for sale is down 1.5% from the all-time high it reached in the spring, and a record-high share of sellers dropped their asking price during the four-week period ending June 26. Pending sales continued to fall, posting their largest decline since May 2020, but there are signs that early-stage home buyer demand is starting to level off.
Redfin chief economist Daryl Fairweather said, “Data on home tours, offers and mortgage purchase applications suggest that home buyers have noticed the shift in power and are no longer leaving the market in droves. Buyers coming back will provide support to the housing market, but between now and the end of year, I think the power will continue to shift towards buyers, resulting in mild price declines from month to month.”
All told, the prospect of returning to an office, a faster pace of interest rate hikes due to inflation, getting laid off and waiting for the housing market to cool off have a lot of potential buyers worried, and understandably so.