New listings were down 19 percent during the four-week period ending May 7, while pending home sales were down 16 percent, according to a new report from Redfin
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Severely limited housing inventory and high mortgage interest rates have throttled the Spring homebuying season, according to a new report from Redfin.
Typically the hottest homebuying season, new listings were down 19 percent during the four-week period ending May 7, the report reads. Pending home sales were down 16 percent compared to last year for the same period, suggesting homebuyers and sellers alike are still being held back by mortgage rates north of 6 percent.
However, the scant amount of homes for sale has created a homebuying environment that feels hotter than it is in reality, with buyers who are willing to pay more for mortgages facing intense competition for the few homes on the market.
Nearly half of the homes that did sell during the four-week period ending May 7 did so within weeks. That share has increased over the last month — unusual for this time of year when homebuying activity usually starts to wind down from the highs of spring.
Mortgage purchase applications are up 5 percent from the same time last year, the report notes.
A separate report from Zillow released this week declared that the drought of new listings is driving prices back up and has brought about the return of a seller’s market.
Taylor Marr | Redfin
“This spring’s housing market is hot but cold, with scant listings making it less active than usual but fast and competitive at the same time,” Redfin Deputy Chief Economist Taylor Marr said in a statement. “The good news is that buyers are out there, trying to find a seat in a game of musical chairs. The bad news is there aren’t enough…