Home write-offs hit a record high as mortgage rates and home prices continued to rise
A record number of homes have been taken off the market in recent weeks as buyers and sellers continue to slump amid rising interest rates and soaring inflation along with growing fears of a recession.
According to recent data from Redfin, 2% of homes for sale in the US were pulled from the market each week on average during the 12-week period ending Nov. 20, compared to 1.6% of homes written off during the same period one year earlier. According to the real estate brokerage.
In many cases, sellers don’t get any offers for the price they’re asking, and sometimes they don’t get offers at all, which is what drives them out of the market, according to the real estate brokerage.
Redfin reported that there was a significant drop in demand driven by higher mortgage rates and home prices.
While mortgage rates have fallen slightly since last month, monthly mortgage payments are still much higher than they were a year ago.
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On Thursday, mortgage buyer Freddie Mac reported that the average 30-year interest rate fell to about 6.49%, down from 6.58% last week. A year ago, the 30-year average rate was 3.11%.
“Some sellers are having a hard time realizing that we’re no longer in a housing market frenzy — it’s hard for them to swallow that they’ve missed the boat on getting a high price,” said Heather Crowe, a Redvine, Florida-based real estate agent. .
By the time sellers realize their home prices are too high, Croay added, their property has already been on the market for far too long.
Among the metros tracked by Redfin, Sacramento, Calif., had the highest share of listings, 3.6%, which was delisted within a 12-week period. This is an increase of 1.6% from last year, according to the brokerage.
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However, Austin, TX. Seattle, Washington. Phoenix, Arizona; Denver, Colorado has also seen a significant amount of active rosters exit the market.
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Although the five aforementioned markets have grown in popularity during the coronavirus pandemic with remote workers, house prices have skyrocketed and now “with so many buyers priced in, it’s among the fastest cooling markets in the country,” according to Redfin.
In Sacramento, for example, there was 0% annual home price growth in October. Last spring, it was as high as 29.3%, according to Redfin.
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