Home delistings hit record as mortgage rates, home prices remain high
Dolly Lenz Real Estate CEO Dolly Lenz and Dolly Lenz Real Estate CEO Jenny Lenz discuss how high inflation affects home sales and mortgage rates on “The Claman Countdown.”
A record number of homes have been taken off the market in recent weeks as buyers and sellers continue to pull back amid high interest rates and soaring inflation coupled with growing fears of a recession.
According to recent data from Redfin, a record 2% of homes for sale in the US were taken off the market each week on average during a 1[ads1]2-week period ending November 20. This compares with 1.6% of the homes that were removed from the stock exchange during the same period a year earlier, according to the estate agent.
In many cases, sellers get no offers for their asking price, and “sometimes no offers at all,” which drives them off the market, according to the realtor.
There has been a big drop in demand driven by high mortgage rates and home prices, Redfin reported.
While mortgage rates have fallen slightly since last month, monthly mortgage payments are still significantly higher than a year ago.
The Home For Sale sign is seen as inflation and interest rates rise on October 27, 2022, in Washington, DC. (Brendan Smialowski/AFP via Getty Images/Getty Images)
HOUSING AGENCIES REPORT RECORD FINANCIAL CUSHION AS THERE WILL BE FOR THE MARKET
On Thursday, mortgage buyer Freddie Mac reported that the average 30-year rate fell to around 6.49%, down from 6.58% last week. A year ago, the 30-year interest rate averaged 3.11%.
“Some sellers have a hard time understanding that we’re not in a housing market frenzy anymore — it’s hard for them to swallow that they missed the boat on getting a high price,” said Florida-based Redfin Realtor Heather Kruayai .
By the time sellers realize they are pricing the home too high, their property has already been on the market too long, Kruayai added.
Among the metros tracked by Redfin, Sacramento, Calif., had the highest percentage of listings, 3.6%, that were removed from the market during the 12-week period. It is up 1.6% from a year ago, according to the brokerage house.
For sale signs are posted in front of a single-family home on Beverly Anne Street on June 13, 2022 in Las Vegas, Nev. (Bizuayehu Tesfaye/Las Vegas Review-Journal/Tribune News Service via Getty Images) / Getty Images)
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| RDFN | REDFIN CORP. | 5.62 | +0.11 | +2.00% |
AMERICANS SEE HIGHER INFLATION: NEW FED
However, Austin, Tex.; Seattle, Washington; Phoenix, Arizona; and Denver, Colorado also saw a good number of active listings come off the market.
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Although the five aforementioned markets surged in popularity during the coronavirus pandemic with remote workers, home prices skyrocketed and now “with many buyers priced out, they are among the fastest-cooling markets in the country,” according to Redfin.
In Sacramento, for example, there was 0% annual home price growth in October. Last spring, it was a whopping 29.3%, according to Redfin.
