There has been a decrease in new listings of US homes for sale by 25% compared to last year, continuing an eight-month trend of double-digit declines, which is making it difficult for buyers to find homes, but giving sellers a competitive edge. The reluctance of people to sell their homes is due to a variety of reasons, including the difficulty in finding another home to buy, many Americans having recently moved, and not wanting to give up their low mortgage rate. Pending home sales are down more 19% nationwide.
Early-stage homebuying demand is slightly increasing, with mortgage-purchase applications up by 8% from a week earlier. Buyers in some areas, such as Nashville, TN, have more options, with new listings and pending sales down about 14% from a year earlier. The median U.S. home-sale price fell by 2.3% year over year to roughly $364,000, the largest decline in more than a decade, with sale prices dropping in more than half of the 50 most populous U.S. metros.
Leading indicators of homebuying activity include average 30-year fixed mortgage rates dropping to 6.27%, the fifth straight week of declines. Mortgage-purchase applications during the week ending April 7 increased 8% from a week earlier, seasonally adjusted. Purchase applications were down 31% from a year earlier.
Desirable, well-priced homes are being snapped up quickly. Some homeowners are reluctant to sell because they don't want to give up their low mortgage rates, and it can be challenging to find another home to buy. Home prices have fallen in more than half of the 50 most populous U.S. metros, with the biggest decline in Austin, Texas (-13.9% year over year). However, prices have risen in some other areas, such as Fort Lauderdale, Florida (11.6% YoY).
While mortgage rates have been dropping for the past five weeks, the average rate for a 30-year fixed mortgage is still relatively high at 6.27%. This has contributed to holding back home sales in some areas. Despite the recent drop in mortgage rates, the limited supply of homes for sale remains a significant obstacle for would-be buyers. Rates dipping below 6% would probably pique the interest of more buyers, but enough homeowners have rates in the 3% or 4% range that a big uptick in new listings is unlikely.
