The surge in mortgage rates since the beginning of this year has fewer people home shopping and applying for mortgages than last year. Although the market still seems hot and homes are selling faster than ever, this is all due to low supply of homes.
According to Redfin, Fewer people are starting online home searches and applying for mortgages than this time last year, and year-to-date growth in home tours remains far below 2021 levels. An increasing share of sellers are also reducing their prices after putting their homes on the market. The share of homes that sell quickly (within 14 days) continues to grow, but at a slower pace than earlier this year.
“Homebuyers may not feel like the market has gotten any easier. That’s because they’re often competing against investors, all-cash buyers and migrants from expensive cities who aren’t as sensitive to mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “But there are early indicators that the market is turning, and we expect the softening to become more apparent in the coming weeks, eventually causing home-price growth to slow. We’ll be watching closely to see whether the market slows from 100 miles per hour to 90 or 100 miles per hour to 75.”