{"id":75044,"date":"2022-09-16T10:00:58","date_gmt":"2022-09-16T17:00:58","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=75044"},"modified":"2022-09-16T09:07:03","modified_gmt":"2022-09-16T16:07:03","slug":"august-housing-market-slowed-by-high-mortgage-rates","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/august-housing-market-slowed-by-high-mortgage-rates\/","title":{"rendered":"Prospective Home Sellers and Buyers Retreated as Mortgage Rates Approached 6%"},"content":{"rendered":"

New listings fell 8% in August to their lowest level since May 2020. Prior to the onset of the pandemic, the last time so few homes hit the market was August 2012.<\/h2>\n

Seasonally-adjusted new listings of homes for sale fell 8% from July to August to their lowest level since May 2020, when the housing market was paralyzed by the onset of the COVID-19 pandemic. Prior to the pandemic, we hadn\u2019t seen so few homes hit the market since November 2012.<\/p>\n

Mortgage rates climbed<\/a> from 5% at the beginning of August to 6% by the end of the month, pushing many homebuyers out of the market. This sharp decrease in demand gave the buyers who were left some additional negotiating power and softened home prices a bit, but caused many potential home sellers to hold off on listing. As a result, the market as a whole is relatively balanced between buyers and sellers, but there\u2019s very little activity in terms of homes being listed and sold.<\/p>\n

\u201cWhen mortgage rates were below 3%, sales and home prices soared. The market was like a game of musical chairs with buyers vying for too few homes,\u201d said Redfin Chief Economist Daryl Fairweather<\/a>. \u201cAs mortgage rates approached 6%, almost everyone left the party. Now the market is more like a middle school dance where a small number of buyers and sellers are pairing up during a slow song.\u201d<\/p>\n

While we may be in a housing recession, the slowdown in sales is not a sign of a bubble bursting, Fairweather went on to explain:<\/p>\n

\u201cThe bottom line is that homeowners don\u2019t need to sell in this environment. They locked in rock-bottom mortgage rates last year and are sitting on piles of equity. The jobs market remains very strong, so there\u2019s little risk that mortgage delinquencies or foreclosures will rise significantly. It would take a severe\u2014not soft\u2014recession to send homeowners into distress. We will have to wait and see if the broader economy steers toward normalcy or recession in the upcoming months.\u201d<\/p>\n

August Highlights<\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Market Summary<\/th>\nAugust 2022<\/th>\nMonth-Over-Month<\/th>\nYear-Over-Year<\/th>\n<\/tr>\n<\/thead>\n
Median sale price<\/td>\n$406,900<\/td>\n-1.3%<\/td>\n7.1%<\/td>\n<\/tr>\n
Homes sold, seasonally-adjusted<\/td>\n500,100<\/td>\n-1.7%<\/td>\n-19.5%<\/td>\n<\/tr>\n
Pending sales, seasonally-adjusted<\/td>\n489,200<\/td>\n0.2%<\/td>\n-17.3%<\/td>\n<\/tr>\n
New listings, seasonally-adjusted<\/td>\n507,400<\/td>\n-19.9%<\/td>\n-21.7%<\/td>\n<\/tr>\n
All Homes for sale, seasonally-adjusted<\/td>\n1,524,400<\/td>\n-1.1%<\/td>\n2.7%<\/td>\n<\/tr>\n
Median days on market<\/td>\n26<\/td>\n5<\/td>\n9<\/td>\n<\/tr>\n
Months of supply<\/td>\n2<\/td>\n-0.2<\/td>\n0.6<\/td>\n<\/tr>\n
Sold above list<\/td>\n37.6%<\/td>\n-9.6 pts\u2020<\/sup>\n\t\t<\/td>\n-14.3 pts\u2020<\/sup>\n\t\t<\/td>\n<\/tr>\n
Median Off-Market Redfin Estimate<\/td>\n$417,800<\/td>\n-0.9%<\/td>\n18.2%<\/td>\n<\/tr>\n
Average Sale-to-list<\/td>\n99.9%<\/td>\n-1.1 pts\u2020<\/sup>\n\t\t<\/td>\n-1.7 pts\u2020<\/sup>\n\t\t<\/td>\n<\/tr>\n
Average 30-year fixed mortgage rate<\/a><\/td>\n5.22%<\/td>\n-0.19 pp\u2020<\/sup><\/td>\n+2.38 pp\u2020<\/sup><\/td>\n<\/tr>\n<\/table>\n
\u2020 – ‘pts’ = percentage point change<\/div>\n

Other August Highlights<\/h3>\n

Competition<\/h4>\n