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Home listings are rising, but buyers aren’t buying due to high interest rates

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1 year ago

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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

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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How buy now, payer later apps could be crushing your credit

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16 hours ago

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April 3, 2025

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‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.

Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”

“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday. 

“This is predatory, and it’s going to get a lot of people in deep trouble.”

RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS

klarna, doordash

DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)

Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.

Consumers may risk getting hit with late fees and interest rates, similar to credit cards. 

“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.

EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER

Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic. 

Ramsey Solutions personal finance expert and ‘The Ramsey Show’ co-host George Kamel discusses the ‘buy now, pay later’ craze and the trend that celebrates the financial benefits of being childless.

“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want. 

“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”

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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers. 

“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”

FOX Business’ Daniella Genovese contributed to this report.

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