The housing market is currently facing a “chicken and egg” problem, according to Insider, whereby elevated mortgage rates are keeping both homebuyers and sellers sidelined, which is, in turn, resulting in a dearth of for-sale inventory. As a result, those who can afford home purchases can’t find homes available to buy. Total listings of both new and existing homes are up 23.4% compared with last May, but those homes are staying on the market for a median of 43 days, which is roughly two weeks longer than they were staying on the market a year ago.
As for-sale inventory dries up and sellers remain unwilling to sacrifice their ultra-low mortgage rates to refinance in today’s high-cost market, experts say home price growth will likely slow during the months ahead.
"Based on current trends, it's possible that [home prices] won't hit the previous year's peak for the first time in our data," said Sabrina Speianu, economic data manager at Realtor.com.
Again, this comes back to still-high mortgage rates. If they remain hovering in the 6% or 7% range, home prices may eventually have to fall down to compensate. Buyers have been getting slammed by the current combination of high rates, high prices, and low inventory.
Advertisement
Related Stories
Build to Rent
Single-Family Rent Growth Remains Elevated, Despite Dip in Multifamily Rental Rates
Multifamily rent growth, specifically, is decelerating since its year-over-year peak of +16.3% in 2022, but in many markets, single-family rents are continuing to rise
Smart Home
How Smart Technology Can Help Homes Sell Faster
Homebuyers are actively seeking out smart features to increase their homes' resale value
Affordability
How Much Must American Renters Earn to Afford Average Rental Prices?
US rents have increased 3.6% year-over-year, pushing the amount renters must earn to afford average rents to around $80K