Real estate agents are receiving numerous calls from first-time homebuyers and cash-ready investors, but there is a shortage of properties available for buyers and their agents to consider. A recent report by Redfin reveals that despite the increased demand, homeowners are hesitant to sell their homes due to declining house prices and mortgage rates, resulting in a lack of increase in home sales.
Redfin has reported a fourth consecutive week of growth in mortgage-purchase applications. During the week ending March 26, the Homebuyer Demand Index, which measures requests for home tours, offers, and consultations with agents, reached its highest point since May of the previous year. However, despite the increased early-stage demand, Redfin noted that pending sales have not shown a corresponding increase. In fact, pending sales have fallen by 19% year-over-year across the country in the four weeks ending March 26, marking the largest drop in about two months.
According to analysts, the main reason for this is the scarcity of available properties that is constraining potential buyers. There has been a 22% decrease in newly listed homes for sale, which is one of the most significant drops since the beginning of the pandemic. Redfin analysts attribute this decline to homeowners’ unwillingness to sell their homes because they do not want to lose their current low mortgage rate.
The median home-sale price in the United States has declined by 1.8% year-over-year to $360,500, which marks the sixth consecutive week of decrease after more than ten years of increase.
Redfin’s Deputy Chief Economist, Taylor Marr, clarified that even though prices continue to rise in some regions, they have decreased by a significant margin, specifically in large tech centers.
In over half (28) of the 50 most densely populated metropolitan areas in the US, home prices have decreased, with Austin, Texas experiencing the largest decline. The next four northern California metropolitan areas with the most significant annual drops are San Jose, San Francisco, Sacramento, and Oakland. For Austin and Sacramento, these are the largest annual decreases since at least 2015.
Conversely, Milwaukee experienced the most significant increase in sale prices, rising 14.1% year-over-year. This was followed by Fort Lauderdale, Florida, Virginia Beach, Virginia, West Palm Beach, Florida, and Providence, Rhode Island.