Mortgage rates are sitting near a two-decade high and U.S. home prices rose 3 percent year-over-year during the four weeks ending Sept. 17, pushing monthly housing payments to an all-time high, according to a new report from Redfin.
Data shows buyers are waiting for homes to become more affordable and for an end to constrained inventory.
Soaring costs have pushed pending home sales down 13 percent from a year ago. The total number of homes for sale is down 16 percent, as many homeowners stay put to keep relatively low mortgage rates, Redfin said.
However, a few more home sellers have jumped off the sidelines. New listings have stabilized, ticking up slightly since the beginning of September. They’re down 7 percent from a year earlier, but that’s the smallest decline since July 2022 (though it’s worth noting that new listings were falling rapidly at this time last year). It’s possible that some homeowners are taking advantage of rising home prices and low inventory, counting on being one of the only homes for sale in their neighborhood.
The Federal Reserve decided against an interest-rate hike at its September meeting but also signaled that interest rates are likely to remain higher than anticipated into 2024 and 2025, which could keep borrowing costs—and mortgage rates—higher for longer.
Buyers who are waiting for housing costs to come down may consider jumping into the market if they can afford to, because a meaningful decline probably isn’t coming soon, according to Redfin.