According to a recent Redfin report: New listings have inched up this fall, giving the buyers who remain in the market a few more homes to choose from. But many buyers are retreating as mortgage rates stay elevated.

New listings of U.S. homes for sale have ticked up 2% since the start of September, and listings haven’t fallen as much from summer to fall as they typically do. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

What home sellers are doing: A few more homeowners are putting their homes on the market, despite being locked into relatively low mortgage rates. The total number of homes for sale is down 14% from a year earlier during the four weeks ending October 8, but that’s the smallest decline since July.

Advice for sellers: Take advantage of still-rising prices; the median sale price is up 3% year over year despite low demand. But with the share of for-sale homes with a price drop at its highest level in nearly a year and high mortgage rates cutting into buyers’ budgets, be mindful of setting a fair price. Redfin agents in some parts of the country report that many move-in ready, fairly priced homes are selling quickly.

What homebuyers are doing: Retreating as mortgage rates sit near their highest level in more than two decades and the median U.S. monthly mortgage payment approaches $3,000. Mortgage-purchase applications inched up slightly this week, but they’re still near their lowest level in nearly 30 years, and Redfin’s Homebuyer Demand Index—which measures tour requests and other early-stage demand signals—dropped to its lowest level in nearly a year.

Advice for buyers: All hope is not lost for people who want to buy a home soon. Even though mortgage rates are likely to remain elevated, buyers on the fence may consider jumping into the market when there’s a small reprieve: Along with the small uptick in new listings to choose from, daily average rates have come down some from the peak they reached last week. “Despite last week’s hotter-than-expected jobs report, rates have fallen after the Fed signaled this week that it is unlikely to hike interest rates again and war broke out in Israel,” said Redfin Economic Research Lead Chen Zhao. “Buyers should also remember that the average mortgage rate in the news is just that: an average. Many buyers can secure a lower rate by shopping around; the difference between rates among lenders is bigger when rates are higher. Buying down a mortgage rate is always an option, too.”

Leading indicators

Key housing-market data

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-new-listings-tick-up

Joint proposal would reduce spread between mortgage rates, Treasury bonds

The Independent Community Bankers of America (ICBA), Community Home Lenders of America, and National Association of REALTORS today proposed a solution to reduce historically high long-term mortgage rates relative to long-term Treasury bonds. The groups’ plan would reduce the historically large spread between 30-year mortgage rates and 10-year Treasuries to promote homeownership affordability.

“With housing accounting for nearly 20% of the nation’s gross domestic product and affecting homeowners and renters nationwide, policymakers must act to promote housing affordability,” ICBA President and CEO Rebeca Romero Rainey said today. “ICBA and the nation’s community banks call on the administration to implement our plan to address lending challenges and mortgage-servicing impediments, which could support demand for mortgage-backed securities and reduce mortgage rates by an estimated 100 to 150 basis points.”

With the combination of high mortgage rates and low housing construction leading to historically unaffordable housing and hampering mortgage lending, the groups issued a joint letter to the White House and Treasury Department urging:

• The Federal Reserve to maintain its stock of mortgage-backed securities and to suspend further runoff until liquidity and the spread between the 30-year fixed-rate mortgage and 10-year Treasury stabilize.
• The Treasury Department to amend the Fannie Mae and Freddie Mac Preferred Stock Purchase Agreements to enable the enterprises to temporarily purchase their own and Ginnie Mae’s mortgage-backed securities.

ICBA will continue working with policymakers to help ease nationwide housing affordability challenges to promote affordable housing for American homebuyers.