The usually hot Spring market was lukewarm for most of the country, and now, as Summer has officially begun, things aren’t looking much better.
According to Redfin, pending home sales fell 16 percent from a year earlier during the four weeks ending June 18. New listings of homes for sale are down 24 percent from a year ago, and the total number of homes for sale is down 8 percent—the biggest drop in over a year.
“There are two things that would jumpstart the housing market: A big drop in mortgage rates and/or a big surge of new listings,” said Redfin Deputy Chief Economist Taylor Marr. “Neither of those things happened this spring; instead, rates rose and new listings dropped to record lows. And with one or two more interest-rate hikes expected this year, mortgage rates are likely to remain elevated at least through the summer, continuing to limit both demand and supply.
“But even though there wasn’t much of a spring homebuying season this year, there was a spring building season,” Marr continued. “That means there’s hope for more listings somewhat soon, with homebuilders working to fill the inventory bucket. Builders broke ground on more single-family homes in May than almost any month in nearly two decades, which could expand buyers’ options by the end of the year.”
Mortgage-purchase applications during the week ending June 16 rose 2 percent from a week earlier, seasonally adjusted, marking the second straight week of increases. Purchase applications were down 32 percent from a year earlier.