As mortgage rates rise, a chill has been cast over the housing market. It is more difficult for many buyers to afford housing prices they could afford a year ago; they are halting their search. Additionally, sellers are apprehensive about listing their homes given the high mortgage rates that would be attached to their next purchase.
National Association of Realtors chief economist Lawrence Yun and others describe the market as frozen, with a decline in home sales activity for 10 straight months. As far back as the group began tracking sales in the late 1990s, this has been the longest streak of declines.
New Jersey-based real estate agent Susan Horowitz said that there is a bit of a standoff between sellers and buyers. Some sellers don’t want to put their houses on the market and there are buyers out there who have certainly seen their purchasing power diminish as interest rates have risen.
Prices haven’t been affected much by the standoff. Since inventory levels have remained low, home prices have remained mostly high regardless of the slump in sales. In November, the number of existing homes that remained unsold dropped for the fourth consecutive month to 1.14 million.
Compared to last year, Elijah Shin noticed fewer people dropping by a recent open house for a charming starter home in Hollywood. According to him, that home would have already been sold if it happened a year ago. Although it may take a little or a lot longer, he still believes that the home will sell. First listed in August, the cottage is still on the market. The offer hasn’t been made yet, four months later.