Home Prices Continue to Accelerate Even as Demand Weakens

Redfin reported on Thursday (9-7-23) that although mortgage rates are inching lower from their recent peak, housing affordability is not improving much. With the US home-sale price up 4.5% year-over-year during the four-week period ending on Sunday, September 3rd and mortgage rates remaining over 7%, the typical monthly mortgage payment is $2,612—just $18 below the all-time high set in May. High housing costs are dampening homebuying demand, with mortgage-purchase applications falling to a 28-year low.

Redfin notes that there is an ongoing problem of rising prices due to a supply shortage. The total number of homes on the market is down 18% year-over-year, the largest decline since February 2022. New listings are down 9% as many homeowners refuse to part with relatively low mortgage rates. But there are still more buyers than sellers in the US.