Holy-moly mortgage rates – so called because that’s what people utter between their teeth when they first see the mortgage payment for a home they want to buy – are hovering around 6% for a 30-year fixed rate mortgage, roughly double of where they’d been in 2020 (data via ). But more sellers are coming to grips with a new reality: Prices have to go where the buyers are, and buyers are around somewhere, but they’re a lot lower (data via ): Price reductions spiked by 50% in June from May and about doubled year-over-year, as sellers are trying to get buyers to show up and take a look as foot traffic has dropped and bidding wars have receded into fond memories. And interestingly, new listings rose in June, when in normal years they peaked in May and dropped in June. TWO, new listings rose in June to 562,000 homes, the second highest June in recent years, behind only June 2019. And this doesn’t bode well for closed sales in June: Back in June, the NAR had reported that “ closed” sales in May also dropped for the 10th month in a row. June was the 10th month in a row of year-over-year declines. These are listings in various stages of the sales process, but before the deal closes. ONE, pending sales in June plunged by 16% year-over-year, after the 12% drop in May, and the 9% drop in April, as potential buyers lost interest in sky-high home prices and holy-moly mortgage rates. There were about 98,000 more homes listed for sale in June than a year ago, according to data from the National Association of Realtors today (data at ): Pent-up supply, plunging sales: it’s just the beginning, but it is happening.Īctive listings jumped in June by 20% from May, and by 19% from a year ago, the second year-over-year increase in a row, after an 8% jump in May, and both were the first year-over-year increases since June 2019. ![]() And to get things moving, price reductions are spiking. This is the “shadow inventory” that is now coming on the market, just when mortgage rates have spiked, and sales are plunging. Then there were other folks like me that pointed out over and over again that people weren’t putting their old homes on the market after they’d bought a new home, and that these people now owned two or three homes and that they were going to ride up the hottest real estate market ever where prices soared 20% or 30% or more per year, and then they’d sell those vacant homes which no one had ever counted as vacant.Īnd because they already lived in a home, they could sell their vacant homes without having to buy another home. By Wolf Richter for WOLF STREET.įor the last two years, the story was that there’s no inventory for sale, that there was a housing shortage, and that’s why prices were skyrocketing. Pent-up supply suddenly shows up – those vacant homes that no one was counting as vacant.
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