Sellers now outnumber homebuyers by a record 63 percent as those discouraged by rising mortgage rates and lingering economic fears have backed off the market, according to the latest data. The buyer count last month fell to its lowest level since real estate brokerage Redfin started tracking data in 2013, down to about 928,892. That number was down 2.4 percent from the month before.
At the same time, sellers hit their highest level since March 2020, when a pandemic homebuying frenzy triggered by historically low borrowing costs took over the country. According to Redfin, there were over 1.5 million sellers in the U.S. housing market in September across all residential property types, up 1.2 percent month-over-month. The gap last month was the largest since the post-recession housing crash—revealing how difficult the market has gotten for U.S. homebuyers since the pandemic.
Americans, however, are in better homebuying shape than during the crash in 2008. The data also show that pandemic hangover is not all that is affecting the market. The surplus of sellers increased toward the end of summer as mortgage rates started climbing and inflation rose, fueled by higher gasoline and diesel prices.
In August, sellers outnumbered buyers by 56.9 percent, which means that the gap grew by nearly 6 percent in just one month. At the end of last year, housing experts and economists expected lower mortgage rates through 2026 to improve housing affordability for Americans. Until late February, mortgage rates were slowly declining.
Before the U.S. and Israel launched joint strikes in Iran at the end of February, the average 30-year fixed-rate mortgage—the most popular form of home loan among American borrowers—reached 5.98 percent, according to Freddie Mac. But fears of economic instability and rising inflation in the U.S., driven by disruption to the global oil market, have caused mortgage rates to reverse course and start climbing back. The Federal Reserve's decision last month to raise interest rates for the first time in three years—which was largely anticipated by the markets—further pushed up mortgage rates.
As of the week ending October 8, the 30-year fixed-rate mortgage averaged 7.4 percent, up from 6.30 percent a year earlier. For the few buyers willing to enter the market now, things could be looking up. Forty-one of the 50 most populous metropolitan areas in the nation are now technically “buyer’s markets”—ones where buyers appear to have the upper hand over sellers and can negotiate better deals for themselves.
Extract — continue reading at the source.
