Lack of Inventory in Several Metro Areas Keeping Home Prices Elevated

Redfin is reporting that the median US home-sale price fell 2.7% during the four weeks ending May 14th, the smallest decline in over a month. At the same time, monthly mortgage payments hit a record high due to still-high prices and elevated mortgage rates. On a local level, home prices are declining in 28 of the 50 most populous US metros, down from a high of 32 metros at the end of April. Redfin says this reflects a mismatch between demand and supply propping up prices. Pending home sales are down 15% from a year earlier, but that’s much smaller than the 24% decline in new listings.

The share of homes selling that are doing so within two weeks (48%) is also bucking seasonal trends, illustrating urgency from buyers who don’t have much to choose from. That share has steadily increased over the last two months, while it typically falls this time of year.

Adding additional background and his analysis, Redfin’s Deputy Chief Economist Taylor Marr said:

“High mortgage rates continue to dictate the housing market. Although a lot of homebuyers have acclimated to rates in the 6% range and many are finding ways to lower their monthly payments, like using a 2–1 buydown, high rates are handcuffing potential sellers It’s hard to imagine a flood of new listings until rates come down at least into the 5s. For those who are selling now, the silver lining of giving up a low rate is that hardly anyone else is doing the same thing. That means buyers, who are hungry for new listings, will bite—and they don’t have much power to negotiate the price down.”