{"id":76403,"date":"2023-06-22T05:00:02","date_gmt":"2023-06-22T12:00:02","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=76403"},"modified":"2023-06-21T14:42:17","modified_gmt":"2023-06-21T21:42:17","slug":"housing-market-update-spring-homebuying-season-never-happened","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-update-spring-homebuying-season-never-happened\/","title":{"rendered":"Housing Market Update: The Spring Homebuying Season That Never Happened"},"content":{"rendered":"

Near-7% mortgage rates are preventing both would-be homebuyers and would-be sellers from entering the market. But even though the spring buying season ended with a whimper, homebuilders are ending spring with a bang: Construction of new single-family homes is near its highest level in almost two decades, providing some hope for an uptick in inventory by next year.<\/span><\/i><\/p>\n

As spring turns into summer, it\u2019s official: The traditionally hot spring homebuying season didn\u2019t come to fruition in 2023. <\/span>This year, instead of the calendar determining the homebuying season, the Federal Reserve is dictating when people buy and sell. And so far, the Fed’s <\/span>actions<\/span><\/a> are suggesting they wait.<\/span><\/p>\n

Pending home sales fell 16% from a year earlier during the four weeks ending June 18. But even though sales are relatively tepid, Redfin\u2019s Homebuyer Demand Index\u2013a measure of requests for tours and other early-stage buying services from Redfin agents\u2013is up 11% year over year. Additionally, there are more house hunters than there are homes hitting the market. New listings of homes for sale are down 24% from a year ago, and the <\/span>total <\/span><\/i>number of homes for sale is down 8%, the biggest drop in over a year.\u00a0<\/span><\/p>\n

Elevated mortgage rates are responsible for the drops on both the demand and supply side. With average rates sitting above 6% all spring, pushing the typical U.S. monthly housing payment up near record highs, many would-be buyers are sitting on the sidelines, waiting for rates to come down. And the buyers who are out there are having a hard time finding listings, with many prospective sellers staying put, hanging onto their relatively low rates: <\/span>Nearly all<\/span><\/a> homeowners with a mortgage have a rate below 6%.\u00a0<\/span><\/p>\n

The continuing inventory shortage is bolstering home prices. The median U.S. home-sale price dropped just 1% year over year this week, the smallest decline in more than three months. On a local level, prices have started leveling off: They fell in half (25) of the 50 most populous metros, compared with 29 a month ago. In San Jose, CA, for instance, the median sale price is up roughly 2% year over year, marking the first increase after eight straight months of declines.\u00a0<\/span><\/p>\n

\u201cThere are two things that would jumpstart the housing market: A big drop in mortgage rates and\/or a big surge of new listings,\u201d said Redfin Deputy Chief Economist Taylor Marr<\/a>. \u201cNeither of those things happened this spring; instead, rates rose and new listings dropped to <\/span>record lows<\/span><\/a>. And with one or two more <\/span>interest-rate<\/span><\/a> hikes <\/span>expected<\/span><\/a> this year, mortgage rates are likely to remain elevated at least through the summer, continuing to limit both demand and supply.\u201d<\/span><\/p>\n

\u201cBut even though there wasn\u2019t much of a spring homebuying season this year, there was a spring building season,\u201d Marr continued. \u201cThat means there\u2019s hope for more listings somewhat soon, with homebuilders working to fill the inventory bucket. Builders<\/span> broke ground<\/span><\/a> on more single-family homes in May than almost any month in nearly two decades, which could expand buyers\u2019 options by the end of the year.\u201d<\/span><\/p>\n

Another glimmer of hope as we enter summer: 65% of adults recently said it\u2019s a good time to sell a home, the highest level since last July, according to Fannie Mae\u2019s <\/span>purchase sentiment index<\/span><\/a>. While that\u2019s unlikely to move the needle much on new listings, it may mean the inventory shortage won\u2019t get worse.\u00a0<\/span><\/p>\n

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