Homebuyer demand softened during the four weeks ending April 17 as buyers pulled back to enjoy a break from surging mortgage rates and housing costs over Easter and Passover weekend, Redfin reports. Roughly 1 in 8 sellers reduced their sale prices amid a drop in mortgage purchase applications and online home searches.
The likely culprit of reduced buyer demand is the 30-year fixed-rate mortgage, which recently jumped past 5%, pushing the average homebuyer’s monthly payment up 38% to an all-time high of $2,318.
“The lull in homebuying and selling activity that we saw over Easter and Passover is likely to continue well past the holiday weekend,” said Redfin Chief Economist Daryl Fairweather. “The forces causing many homebuyers to pump the brakes are still in place—increasing mortgage rates and record-high home prices. We expect price increases to slow and buyers in bidding wars to face fewer competing offers, but substantial relief for homebuyers is unfortunately still well beyond the horizon since the housing market is still tilted further in sellers’ favor than at any time in history.”
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