Home sales declined dramatically over the last year due to high prices and interest rates, Axios reports, leading to a real estate market that's "dead" at the moment.
Redfin chief economist Daryl Fairweather noted that anyone looking to sell their house this year most likely did so at the beginning of the year when it became clear that mortgage rates would start increasing. The average 30-year fixed-rate mortgage rose to 6.29% last week, the highest since 2008, causing monthly mortgage rates to rise about 45% compared to last year.
"That's contributing to how dead it is right now," Fairweather said.
Jonathan Miller, chief executive of New York appraisal firm Miller Samuel, added that home prices are "sticky on the downside … meaning that when markets fall, sellers are reluctant to take a lower price because they stick to the value they think it's worth."
Redfin real estate agent Tzahi Arbeli, who is based in Las Vegas, Nevada, said that "House hunters today are taking their time and exploring their options, whereas six months ago, they had to act quickly and pull out every stop to compete because homes were selling almost immediately.
"Homebuyers now will agree to buy a house and be doing the inspection, and then back out because they found another home they love more."
"Some homebuyers are finding that by the time they go under contract and lock in their mortgage rates, rates could be much higher than they were when they toured the home and/or got pre-approved. That can kill the deal because the buyer is no longer financially comfortable with the purchase," added Redfin real estate agent Sam Chute, who is based in Miami. "I advise sellers to price their homes competitively based on the current market because deals are falling through and buyers are no longer willing to pay pie-in-the-sky prices."
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