There's so little housing stock that even as mortgage rates climb, homes are selling above their asking price, a report by Redfin says.
New home listings are down 25% since last year, sinking beneath 2020 lows, according to the report. Total home listings are down 12%.
This supply slump made monthly homeowner payments skyrocket, but Redfin says, "despite the double dilemma of low inventory and high prices, early-stage homebuyer demand is picking up."
The amount of home shoppers actually increased compared to last summer: the brokerage company's seasonally adjusted homebuyer demand index, which measures home tours and other homebuying service requests, increased by 11% this year.
Mortgage applications were also on the rise in June but just dropped again.
The demand index remained below 2020 and 2021 levels, however, as both prices and rates have increased significantly over the past three years.
The average 30-year fixed mortgage rate hit an all time low of 2.65% in January 2021. Then it sprung back up, peaking at 7.08% last November. It's remained high ever since — this week, the average rate was 6.81% according to Freddie Mac.
Home price trends follow a similar pattern: Redfin's seasonally adjusted data shows a dip in the national median sale price during 2020, when it hit $292,000. Then, it steadily rose until last spring, reaching $415,000. The median price then dipped down slightly. Now, Redfin says, it's $402,000.
The median asking price is up right now, too, but not by much. It hit $395,725 this month, an increase of only 1.1% from last year.
"Almost every home is getting multiple offers and selling over asking price," Redfin agent Jeremy Lucas said in the report. "The lack of supply is making it feel almost like 2021 all over again, but higher rates mean bidding wars are happening more in the $500,000 range than the $700,000 range because people can afford less."
Homebuyer payments, which Redfin calculates using the 4-week rolling average of the median asking price, are shockingly high. Using last week's average interest rate of 6.71%, Redfin estimates that homebuyers will have to pay $2,622 each month, an increase of 13.6% from the same time last year.
There were only 770,210 homes for sale this month, and listings aren't rising like they usually do in the summer. Instead, they've remained flat all year.
The average home has an average sale-to-list price ratio of 100.1%, meaning homes are selling for slightly more than their asking price. It's the first time the ratio breached 100% this year.
The "lack of homes for sale is the main reason" for this, the report says, because homebuyers are battling it out in an unusually sparse market.
