The ongoing slowdown in the housing market will continue into the end of the year as rising mortgage rates discourage potential homebuyers, according to the latest analysis from real estate firm Redfin.
Redfin saw a “slump” in home viewing activity, down 38% in the last four weeks since January, with falling demand causing a near-record proportion of homeowners to slash their asking prices.
The average home sold for 0.3% below asking price in the four weeks ended Sept. 4 — meaning first-time homes have not sold above their list price in a year and a half, according to the company’s latest market report.
“The housing market always cools off this time of year, but this year I expect the fall and winter to be particularly cold as sales dry up more than usual,” said Redfin chief economist Daryl Fairweather.
“Thanks in large part to mortgage rates near or even exceeding 6%, potential homebuyers and sellers are focusing on the back-to-school season and enjoying the final days of summer, rather than ending up in an uncertain market,” Fairweather added.
According to Freddie Mac, the average 30-year fixed-rate mortgage was 5.89% this week, up from 5.66% the previous week. Mortgage rates are at their highest since November 2008 when the economy was in the grip of the subprime mortgage crisis.
According to RedFin, new listings for homes for sale fell 18% year over year in the four weeks ended Sept. 4. In the same period, 35% of homes sold above their list price, compared to 49% in the same period a year ago.
The median selling price ratio, or final cost, of homes compared to their asking prices fell to 99.7% from 101.2% year-over-year. In other words, the average home sells below its list price.
The housing market has slowed from its blistering pace during the COVID-19 pandemic as the Federal Reserve moves ahead with rate hikes. Policy tightening has contributed to the rise in mortgage rates that has hampered affordability for prospective homebuyers.
As The Post reported earlier this week, the average US home price fell 0.77% from June to July, according to a separate report from mortgage analysis firm Black Knight. That figure marked the largest monthly decline in home values since January 2011.
https://nypost.com/2022/09/08/us-housing-market-to-remain-especially-frigid-as-mortgage-rates-spike-redfin/ US housing market remains ‘extra cold’ as mortgage rates rise: Redfin