Lack of New Listings Has U.S. Home Buyers Snapping up Properties Fast
“Buyers can’t buy if sellers don’t want to sell,” according to Redfin
BY V.L. HENDRICKSON
Homes selling fast in the U.S. despite a cooling market. PIXABAY
A dearth of new listings in the U.S. has homes selling fast, making some areas seem “hot” in a cooling market.
New listings registered a 21.8% annual drop during the four weeks ending Sunday, according to a Redfin report released Thursday. It was one of the most significant stock declines since the start of the pandemic, “contributing to an unseasonal early-spring decline in the total number of homes for sale,” the report said.
Indeed, homeowners are reluctant to list their properties because they don’t want to give up the low mortgage rates they have. Average 30-year mortgage rates dropped to 6.28% this week—their fourth-straight decline—but that’s still more than double the sub-3% rates common in 2021, the report said.
“Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers. Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow,” Taylor Marr, Redfin’s deputy chief economist, said in the report. “Today’s serious home buyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly.”
Meanwhile, pending home sales dropped 19% year over year, the data showed. Demand has slowed, but the lack of options is also dampening sales.
At the same time, sales are happening quickly—again, that’s due to the lack of homes on the market. Of the homes going into contract, nearly half are doing so within two weeks, the report said. That’s up from about one-quarter at the start of the year, an unusually quick winter increase.
The way home buyers are snapping up properties now, it would take less than three months for today’s supply of for-sale homes to sell—the shortest time since September, the data showed. It was the fastest winter decline in months of supply since at least 2015, in percentage terms. It’s up from a near-record-low of 1.9 months a year ago, and down from a three-year high of 4.5 months in late January.
“The lack of homes hitting the market explains why the market is moving fast even though sales are still down,” Mr. Marr said. “The lack of new listings is also one reason why sales are down: Buyers can’t buy if sellers don’t want to sell.”
Via Mansion Global