In its latest report, Redfin, the Seattle-based, technology-powered real estate brokerage firm, reported that for the week ending June 19, homebuying demand pulled back further as mortgage rates reached their highest level in since 2009.
Redfin’s Homebuyers Demand Index—which measures buyers request for home tours, offers, and other requests for agents’ help—posted its largest decline in over 2 years. On the other hand, the report notes that sellers are not holding out. The weekly share of listings with a price drop reached a new high during the same four-week period ending on June 19.
Daryl Fairweather, Redfin’s Chief Economist, said:
“Mortgage rates near 6% have put a big chill on demand for homes. With home prices still at record highs, the affordability crisis has been dialed up to an 11 out of 10. Home sellers are aware of this as well; a record share are dropping their asking price. Even though there are fewer home sales, prices have not declined any significant amount yet. But if the housing market continues to cool, prices could fall in 2023.
Many home sellers have it stuck in their head that homes are selling a certain amount above asking, or that they can underprice their home to try to generate a bidding war, but that strategy isn’t working anymore.”
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Housing Market Update: Homebuying Demand Dips Further as Rates Approach 6%