It’s feeling a bit like Groundhog’s Day when we post our weekly Mortgage Minute feature as the headlines by and large remain the same: Rates Continue To Rise.
In fact, mortgage rates are jumping at record-setting pace, with Redfin noting that the typical monthly mortgage payment is up more than $500 since the beginning of this year. But will these mortgage rate hikes finally slow home-price growth?
Yes…but not overnight.
“Homebuyers may not feel like the market has gotten any easier. That’s because they’re often competing against investors, all-cash buyers and migrants from expensive cities who aren’t as sensitive to mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “But there are early indicators that the market is turning, and we expect the softening to become more apparent in the coming weeks, eventually causing home-price growth to slow. We’ll be watching closely to see whether the market slows from 100 miles per hour to 90 or 100 miles per hour to 75.”
Redfin analysis shows that fewer people are starting online home searches and applying for mortgages than at this time last year. Additionally, an increasing share of sellers are also reducing their prices after their initial asking prices prove unsuccessful.
Google searches for “homes for sale” were down 9.7 percent year-over-year during the week ending March 19, according to Google Trends data. By comparison, searches for the same term were flat as of late January.