{"id":76112,"date":"2023-04-20T12:08:37","date_gmt":"2023-04-20T19:08:37","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=76112"},"modified":"2023-04-20T12:10:41","modified_gmt":"2023-04-20T19:10:41","slug":"housing-market-update-high-housing-costs-low-inventory","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-update-high-housing-costs-low-inventory\/","title":{"rendered":"Housing Market Update: Home Prices Drop 3%, But Monthly Housing Payments Hit Record High As Mortgage Rates Tick Up"},"content":{"rendered":"

Despite high housing costs and a limited supply of homes for sale, many people are out house hunting.\u00a0<\/span><\/i><\/p>\n

The typical U.S.\u00a0 homebuyer\u2019s monthly housing payment hit an all-time high of $2,538 as average weekly mortgage rates rose to 6.39% after five consecutive weeks of declines. The new high comes in spite of the median home-sale price dropping 2.6% from a year earlier during the four weeks ending April 16, the biggest decline in over a decade. <\/span><\/p>\n

Elevated housing costs are one reason would-be homebuyers are backing off: Pending home sales are down 19% from a year ago, the biggest drop in nearly three months, and mortgage-purchase applications <\/span>declined 10%<\/span><\/a> over the last week. Buyers are also limited by the shortage of homes for sale, with new listings down 21% as homeowners <\/span>stay put<\/span><\/a> to hang onto comparatively low mortgage rates.\u00a0<\/span><\/p>\n

But while fewer people are buying homes, many are searching. Redfin\u2019s Homebuyer Demand Index\u2013a measure of requests to tour homes, make an offer or start a home search\u2013rose 3% from a week earlier and 12% from a month earlier during the week\u00a0 ending April 16. The demand index was down 7% from a year ago, but that\u2019s the smallest decline in eleven months.\u00a0<\/span><\/p>\n

\u201cHomebuyers are window shopping and many are entering the store, but few of them are making it to the cash register yet,\u201d said Redfin Deputy Chief Economist Taylor Marr<\/a>. \u201cThere\u2019s not much on the shelves to choose from, and high mortgage rates and still-high prices are making homes too expensive for many buyers. Some buyers are discouraged by mortgage rates rising this week, which is partly due to stronger-than-expected <\/span>bank earnings<\/span><\/a> making it more likely the Fed will hike interest rates next month.\u201d<\/span><\/p>\n

The market looks different in different parts of the country. Los Angeles Redfin agent Costanza Genoese Zerbi<\/a> said that while few homeowners are moving, locked in by low rates, first-time buyers are on the hunt . There\u2019s enough demand and such limited supply that all her recent listings received multiple offers.<\/span><\/p>\n

\u201cI listed a three-bedroom home that needed work in a desirable part of Long Beach. It was listed at $1.3 million, got 17 offers and sold for $1.5 million,\u201d she said. \u201cMy advice for today\u2019s buyers is to look for a home you love, not an investment. Mortgage rates are high and prices are still high, so you may not earn equity as quickly as you would have if you\u2019d purchased a home two years ago. But if you\u2019re buying your dream home in a place you want to live, it\u2019s worth it.\u201d<\/span><\/p>\n

In Washington, D.C., some homeowners are taking advantage of limited supply and the uptick in competition. \u201cMany sellers are sitting on a ton of equity. Maybe they bought their home 10 years ago and it\u2019s gone up in value by hundreds of thousands of dollars,\u201d said local Redfin agent Marshall Carey<\/a>. \u201cEven with high rates, it\u2019s a good time to move up because they have so much money in the bank to get a nicer home in a better location.\u201d<\/span><\/p>\n

Home Prices Falling in More Than Half of the U.S.<\/span><\/h2>\n

The median U.S. home-sale price fell for the eighth straight four-week period after more than a decade of increases.<\/span><\/p>\n

Home-sale prices dropped in 30 of the 50 most populous U.S. metros, with the biggest drop in Austin, TX (-15.1% YoY). It\u2019s followed by Oakland, CA (-11.5%), Sacramento, CA (-9.5%), San Francisco (-9.2%) and Seattle (-9.1%).<\/span><\/p>\n

On the other end of the spectrum, sale prices <\/span>increased <\/span><\/i>most in Fort Lauderdale, FL, where they rose 9.1% year over year. Next come Cincinnati (9%), Miami (8.5%), West Palm Beach, FL (8%) and Milwaukee (7.2%).\u00a0<\/span><\/p>\n

Leading indicators of homebuying activity:<\/span><\/h2>\n