Despite higher housing costs and limited supply, many people are still looking for homes. The typical monthly housing payment for U.S. homebuyers hit an all-time high of $2,538 due to rising mortgage rates. However, at the same time, the median home-sale price dropped 2.6% from the previous year. This has caused some would-be homebuyers to back off, resulting in a 19% drop in pending home sales compared to the previous year, and a 10% decline in mortgage-purchase applications over the last week.
Even with these challenges, many people are still searching for homes, as indicated by the 3% rise in the Homebuyer Demand Index from the previous week and the 12% increase from the previous month. However, this is still down 7% from a year ago, which is the smallest decline in eleven months.
The housing market looks different in different parts of the country. For example, in Los Angeles, first-time buyers are still actively looking for homes, and in Washington, D.C., some homeowners are taking advantage of the limited supply and increased competition to sell their homes and upgrade to a nicer one. Inventory is in short supply in the Washington DC and Baltimore suburbs. Nice homes that are priced correctly are getting a lot of activity and there are still many situations where multiple bids are being considered.
Finally, some leading indicators of homebuying activity, such as average 30-year fixed mortgage rates increasing to 6.39% and mortgage-purchase applications declining 10% from the previous week. The Homebuyer Demand Index hit its highest level in nearly a year during the week ending April 16, but was still down 7% from a year earlier. Google searches for "homes for sale" were up compared to November, but down from a year earlier. Touring activity was also up compared to the beginning of the year, but down from the same time last year across the entire country.
