Home Listings Spike as Sellers Look for Buyers While Prices Remain High

Home Listings Spike as Sellers Look for Buyers While Prices Remain High
A sign is posted in front of new homes for sale at Hamilton Cottages in Novato, Calif., on Sept. 24, 2020. (Justin Sullivan/Getty Images)
Naveen Athrappully

There has been an increase in home listings during recent weeks as sellers jump to cash in on the current high home prices.

New listings climbed almost twice as fast for the four weeks ending May 15 compared to the same period in 2021, according to a May 19 press release by real estate brokerage Redfin. New listings rose by 15 percent from a month earlier compared to a 7.8 percent increase in the same period last year.

“Rising mortgage rates have caused the housing market to shift, and now home sellers are in a hurry to find a buyer before demand weakens further,” according to Redfin Chief Economist Daryl Fairweather.

“Not only are more homes hitting the market each week, but sellers are dropping their prices at rates not seen since before the pandemic.” In the previous four weeks, 17.8 percent of homes dropped their price, the highest share since October 2020.

Interest on 30-year fixed-rate mortgages averaged 5.1 percent as of May 26, according to a press release by Freddie Mac. A year ago, interest rates averaged just 2.95 percent. Interest on a 15-year fixed-rate mortgage averaged 4.31 percent compared to 2.27 percent last year.

In addition to high interest rates, home prices remain elevated, thus dampening buyer demand. For the four-week period ending May 15, the median home sale price was a record $398,500, up 16 percent year-over-year, Redfin said.

The median asking price of newly listed homes rose 18 percent year-over-year to $416,425, which is a new all-time high.

According to an analysis by CNBC, a buyer purchasing a $300,000 home with a 30-year fixed-rate mortgage and 20 percent down payment in May 2019 would have had to pay a monthly installment of $1,192 as a principal and interest payment. In May 2022, buyers will have to shell out $1,991, or roughly $800 more for the same house.

“We used to get 10 to 15 offers on most houses,” Lindsay Katz, a real estate broker at Redfin in the Los Angeles area, told CNBC. “Now I’m seeing between two and six offers on a house, a good house.”

As customers turn cold on the housing market, the supply of homes for sale is building up, jumping by 9 percent in the week ending May 22 compared to a year ago, according to the real estate listing website Realtor.com. This is the biggest yearly gain the company has recorded since 2017.

For the week beginning May 23, the available inventory of unsold single-family homes in the country rose by 8.2 percent according to Altos Research.
For April, sales of new single-family homes declined 16.6 percent to 591,000 from 709,000 in March, according to a May 24 press release by the U.S. Census Bureau and the Department of Housing and Urban Development. Compared to April 2021, sales were lower by 26.9 percent.