Finance
Home listings are rising, but buyers aren’t buying due to high interest rates
Home listings rose by the largest amount in three years. (iStock)
Home listings were up by 13% year over year at the end of February, according to a report from Redfin. This is the largest increase in three years.
The total inventory on the market is also holding steady. This is the first time in about nine months that the number of homes on the market hasn’t declined.
While home listings are up, so are home prices. Housing prices are still historically high, the Zillow report found. The average mortgage payment is $2,671, close to last October’s record high.
These high costs have lowered pending sales by 8%, which is the greatest decline in five months. So, while listings are up, purchases are down as buyers struggle to deal with high housing costs and record-high homeowners insurance costs.
Even though purchases are down, buyers are still looking at homes. Redfin measures the requests it gets for tours and other homebuying services through its Homebuyer Demand Index. The Index is up by 10% from a month ago and at its highest point since September.
“House hunters are out there, and competition picks up every time mortgage rates decline a bit,” said Brynn Rea, a Redfin Premier agent in Spokane, Washington.
“I’m telling buyers who can afford it to look now while they have more breathing room and less competition,” Rea said. “They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%.”
If you think you’re ready to buy a home, consider using Credible to help you easily compare mortgage loan interest rates from multiple lenders at once.
HOMEBUYERS CONSIDERING PURCHASING TINY HOMES AND FIXER-UPPERS TO COMBAT HIGH HOME PRICES
Mortgage rates hover near 7%
Buyers are weary of buying, in large part due to mortgage rates rising. Rates haven’t continued dropping as the Federal Reserve and housing experts signaled they might at the end of last year. At the end of February, 30-year fixed-rate mortgages averaged 6.94%, marking the fourth week in a row rates increased, according to Freddie Mac.
While 15-year mortgages fared slightly better, dropping to an average of 6.29%, this is still higher than when rates averaged 5.89% last year.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying,” Freddie Mac Chief Economist Sam Khater said. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.”
Although interest rates are high, they’re not as high as they have been in the last few years. If you want to lower your monthly payment, consider refinance now. Use Credible’s free online tool to browse different mortgage refinance lenders and see what your loan options are.
15% OF AMERICANS HAVE CO-PURCHASED A HOME WITH A NON-ROMANTIC PARTNER, EVEN MORE WOULD CONSIDER IT
Home sellers’ profits are trending down
No one is making out in this turbulent housing market. Buyers are struggling to find affordable homes, but sellers are also making less on the sale of their properties.
In 2023, sellers made about $121,000 in profit, on average, decreasing from $122,600 in 2022, according to an ATTOM report. Although 2023’s profits were generally high, it was the first year they decreased since 2011 when the market recovered from the 2008 recession.
“Last year certainly stood out as another very good year for home sellers across most of the United States. Typical profits of over $120,000 and margins close to 60 percent were still more than double where they stood just five years earlier,” ATTOM CEO Rob Barber said.
Interest rates and other high housing-related costs aren’t helping seller profits look up for 2024.
“In 2024, the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but homeownership costs that remain a serious financial burden for many households,” Barber said.
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes, all without hurting your credit score.
1 IN 5 HOMEOWNERS THINKING OF SELLING IN THE NEAR FUTURE: ZILLOW
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JPMorgan Chase CEO Jamie Dimon said Wednesday the looming tariffs that President Donald Trump is expected to slap on U.S. trading partners could be viewed positively.
Despite fears that the duties could spark a global trade war and reignite inflation domestically, the head of the largest U.S. bank by assets said they could protect American interests and bring trading partners back to the table for better deals for the country, if used correctly.
“If it’s a little inflationary, but it’s good for national security, so be it. I mean, get over it,” Dimon told CNBC’s Andrew Ross Sorkin during an interview at the World Economic Forum in Davos. “National security trumps a little bit more inflation.”
Since taking office Monday, Trump has been saber-rattling on tariffs, threatening Monday to impose levies on Mexico and Canada, then expanding the scope Tuesday to China and the European Union. The president told reporters that the EU is treating the U.S. “very, very badly” due to its large annual trade surplus. The U.S. last year ran a $214 billion deficit with the EU through November 2024.
Among the considerations are a 10% tariff on China and 25% on Canada and Mexico as the U.S. looks forward to a review on the tri-party agreement Trump negotiated during his first term. The U.S.-Mexico-Canada Trade Agreement is up for review in July 2026.
Dimon did not get into the details of Trump’s plans, but said it depends on how the duties are implemented. Trump has indicated the tariffs could take effect Feb. 1.
“I look at tariffs, they’re an economic tool, That’s it,” Dimon said. “They’re an economic weapon, depending on how you use it, why you use it, stuff like that. Tariffs are inflationary and not inflationary.”
Trump leveled broad-based tariffs during his first term, during which inflation ran below 2.5% each year. Despite the looming tariff threat, the U.S. dollar has drifted lower this week.
“Tariffs can change the dollar, but the most important thing is growth,” Dimon said.
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