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Early indicators of homebuyer activity falter further as mortgage rates shoot up
(NASDAQ:RDFN) —Early-stage homebuying demand continues to falter this spring as new listings fell 7% from a year earlier, according to a new listings report from Redfin (redfin.com), the technology-powered real estate brokerage. At the same time, the average 30-year fixed mortgage rate shot up to 5% and the median asking price climbed to $397,747, sending the typical homebuyer’s monthly payment up 35% year over year to an all-time high of $2,288.
Here are the key early indicators that show demand is softening at a time of year it typically springs up:
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Fewer people searched for “homes for sale” on Google—searches during the week ending April 9 were down 3% from a year earlier.
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The seasonally-adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—has declined 3% in the past four weeks, compared to a 5% increase during the same period last year. The index was up 2% from a year earlier.
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Touring activity from the first week of January through April 10 was 23 percentage points behind the same period in 2021, according to home tour technology company ShowingTime.
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Mortgage purchase applications were down 6% from a year earlier, while the seasonally-adjusted index increased 1% week over week during the week ending April 8.
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For the week ending April 14, 30-year mortgage rates rose to 5%—the highest level since February 2011. This was up from 4.72% the prior week, and the fastest three-month rise since May 1994.
Redfin is also closely watching the accelerating share of home listings with price drops, which is climbing at its fastest spring pace since at least 2015, another sign that demand is not meeting sellers’ expectations.
“There really is a limit to homebuyer demand, even though the market over the past few years has made it seem endless,” said Redfin Chief Economist Daryl Fairweather. “The sharp increase in mortgage rates …
Full story available on Benzinga.com
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