- SUMMARY
The housing market in the United States is currently facing challenges due to high interest rates and home prices.
Mortgage rates have reached a new record high of 7.37% for a 30-year fixed-rate loan, resulting in all-time record monthly housing payments of $2,747.
This increase is driven by the Federal Reserve’s efforts to control inflation.
Home prices remain elevated, with the national median sold price only $5,000 below the record high set in June 2022.
This is attributed to a shortage of homes for sale and strong demand.
However, there are indications of a slowdown in home demand.
Pending home sales, which measure contracts signed between buyers and sellers, have decreased by 4% year-over-year.
New listings, representing available homes for sale, have increased significantly, suggesting an uptick in supply.
Inventory levels of brand new homes for sale have also risen, and prices have decreased by 7.6% from their peak in October 2022.
In contrast, existing home prices continue to trend close to record highs.
Days on the market, indicating the time it takes for a home to sell, have increased to 37 days, reflecting a slight slowdown in the pace of sales.
The share of price drops, indicating homes being sold below the original asking price, is also at a three-year high.
Redfin’s Homebuyer Demand Index, measuring homebuyer interest, has fallen to a three-year low, signaling a decline in demand.
Overall, the housing market is experiencing increasing supply, slower demand, and sustained high housing payments due to elevated interest rates.
However, these trends may change as the interest rate environment evolves and the market adjusts.
- Key Takeaways
Mortgage Rates and Housing Payments on the Rise
Mortgage rates have reached 7.37%, leading to record-breaking monthly housing payments of $2,747 due to the Federal Reserve’s inflation control efforts.
Mixed Signals in Home Demand
While home prices remain high, indicating strong demand, there are signs of a slowdown.
Home sales have decreased by 4% year-on-year, and pending and new listings have increased.
Market Indicators Pointing Towards a Slowdown
Inventory levels in new homes have increased, while prices have decreased.
Days on the market have increased, homebuyer interest is at a three-year low, and the share of price drops is at a three-year high.