In addition to home loan rates hitting their highest levels in two decades, home prices edged upward for the week ending Aug. 12 compared with this same time period last year.
“For the third cosecutive week, the median home listing price maintained a slight upward trajectory,” says Realtor.com® economic data manager Sabrina Speianu in her analysisHere’s what the latest real estate statistics seem to foretell in our latest installment of “How’s the Housing Market This Week?”
Why record-high mortgage rates affect both homebuyers and sellers
Record-high mortgage rates aren’t just weighing down buyers—they’re tethering sellers to their homes, too.
Speianu explains that most homeowners have loans at much lower rates than what’s available today, which has “effectively anchored prospective sellers” to their properties and kept them from listing.
And the latest numbers bear this out: For the week ending Aug. 12, the total number of homes for sale fell below year-ago levels by 8.6%. New listings were also down, sinking by 8.1%. In fact, fresh listings have been falling for 58 weeks straight.
“The continued drag from existing homeowners choosing to stay put is holding back overall inventory,” explains Speianu. “We expect a dip of 5% for 2023 overall compared to 2022.”
With the housing supply down, this has put upward pressure on prices. In July, home prices hovered at a national median of $440,000—and for the week ending Aug. 12, prices continued to rise by 0.2% compared with the same week last year.
Still, homebuyers in desperate need of good news can hang on to this nugget of hope: Home prices are unlikely to surpass the June 2022 high of $449,000. In fact, they’re bound to start going down seasonally as we head toward the end of the year.
“The median listing price has begun its typical seasonal decline,” says Speianu.
In other words, lower home prices lie ahead. And all in all, Speianu thinks the market is slowly trending in “a more buyer-friendly direction.”
Here’s why: While fresh listings are down annually, that gap has been shrinking.
“This week’s data shows a 5.9 percentage point improvement over last week,” says Speianu.
And buyers looking for a workaround to low inventory can always turn to new construction.
“New-home sales continue to climb from year-ago lows,” says Speianu.
Why the fall housing market will be better for homebuyers
This summer’s torrid housing market stands to cool off and bring some relief to homebuyers this fall.
“As we look to the upcoming autumn season, which is typically the best time to buy a home, a glimmer of optimism emerges,” notes Speianu. If current trends in housing supply continue, “It does appear that more newly listed homes could be available than the record low set last fall and winter.”
The upshot is that eager buyers shouldn’t dilly dally on making an offer if they find a home they like. While homes spent six more days on the market for the week ending Aug. 12 compared with this time last year, that sluggish pace might soon pick up.
“By fall, we could even see homes selling faster than one year ago,” Speianu predicts.