According to national property broker Redfin, new listings of homes for sale fell 22.4% nationwide from a year earlier during the four weeks ending April 23, 2023, one of the biggest declines since the start of the pandemic.
Homeowners are staying put because they want to hang onto their low mortgage rates--this week's average 30-year mortgage rate increased for the second week in a row--and because it's hard for them to find another home to buy. The lack of new listings is driving an unseasonal decline in the total number of homes for sale.
The dearth of inventory is also making some homes sell quickly. Nearly half of homes on the market are selling within two weeks, the highest portion in nearly a year. The share has increased throughout April, atypical for this part of the year. That's in spite of elevated mortgage rates keeping some buyers on the sidelines, with pending home sales down 17% year over year.
Buyers are battling for the few homes on the market, keeping home prices from falling more. The U.S. median sale price is down 2.8% year over year, similar to the price declines we've seen over the last month. Prices are falling more in some parts of the country and increasing in others; they're down most in Austin, TX (-13.7% YoY), Oakland, CA (-13.5%) and San Francisco (-12.3%).
"High mortgage rates have caused some homebuyers to bow out of the market. But there are still more people looking for a home than there are homes for sale," said Redfin Deputy Chief Economist Taylor Marr. "That's good news for the homeowners who want or need to sell their home now. In certain parts of the country where new listings are especially rare, sellers who price their homes in line with the market are attracting multiple offers. Propped-up home prices and values also bode well for the future of the housing market because they may eventually lure more prospective sellers off the sidelines."
Phoenix Redfin agent Heather Mahmood-Corley said demand is outpacing supply in her area. "New listings have slowed over the last few weeks and buyers are clamoring for the homes that do come on the market," she said. "Nice, well-priced homes are getting multiple offers. I showed a home to a buyer last weekend and we had to wait in line because there were so many prospective buyers there. It was the first time in a year I've had to wait in line to see a house."
In Seattle, prices and pending sales have both declined more than the national average. But local Redfin agent Shoshana Godwin said she's noticing an uptick in demand this month. "Some buyers are hoping to get a deal because mortgage rates are high, but prices for desirable homes are actually going up because there's such limited inventory," Godwin said. "I'm telling buyers that prices may rise from here because inventory will remain tight as long as interest rates are high. Those who can afford to should consider buying now if they're lucky enough to find a home they want."
Leading indicators of homebuying activity:
Key housing market takeaways as of mid-April 2023: