According to the latest report from real estate firm Redfin, listings of homes for sale in the U.S. hit a record high in November, thanks to a severe freeze in the market that stunned sellers.
An average of 2 percent of U.S. homes listed for sale were delisted each week during the 12-week period ending Nov. 20, the report said. The share of foreclosures was the highest on record, up from 1.6% in the same period a year ago.
The increase in homes listed for sale is due to a recent drop in buyer demand. According to Redfin. Homeowners have been listing their properties in anticipation of huge housing offers during the pandemic — instead, they’re struggling to find buyers at all.
“It’s hard for some sellers to understand that we’re no longer in a frenzy in the housing market — it’s hard for them to win that they missed the boat on getting a higher price,” said Florida-based Redfin Realtor Heather Cruayai. estate agent.
“By the time sellers realize their listing is priced too high, it has already been on the market for too long and is considered outdated,” Kruayai added.
Buyer demand has plummeted due to a sharp rise in mortgage rates, which have more than doubled this year as the Federal Reserve raises interest rates. According to the firm, the average monthly payment on a long-term mortgage is 40% more expensive than at the same time last year.
“Typically, sellers who take their listing off the market in the fall do so with the intention of re-listing in the spring,” said David Palmer, a Seattle-based Redfin agent. “But with the word ‘recession’, there’s not as much optimism that spring will be a better market. Now people are talking about trying again in a year or two after the economy gets better.”
The sharpest increases in foreclosures have occurred in so-called “pandemic boomtowns,” which have experienced record home price increases in recent years.
In Sacramento, California, for example, 3.6% of home listings were removed per week over a 12-week period — the most of any metro area tracked in the report.
Redfin based its calculations on the 43 most crowded U.S. real estate markets for which sufficient data is available.
As Fed Chairman Jerome Powell described, the delisting is just one symptom of what he describes as the current US housing bubble. Home prices are falling rapidly in many markets as sellers try to drum up interest despite a rough economic outlook.
Last week, research firm DataTrek warned that home prices could fall as much as 20% over the next few years as a housing correction takes hold across the country.