A record number of homes have been delisted from the market in recent weeks as buyers and sellers continue to back off amid high interest rates and soaring inflation coupled with growing fears of a recession.
According to recent data from Redfin, a record 2% of homes for sale in the US were taken off the market each week on average during a 12-week period ending Nov. 20. That compares with the 1.6% of homes that were demolished during the same period one year earlier, according to real estate brokerage.
In many cases, sellers are getting no offers for their asking price, and “sometimes, no offers at all,” which is driving them from the market, according to the real estate brokerage.
There has been a huge dip in demand driven by elevated mortgage rates and home prices, Redfin reported.
While mortgage rates have dipped slightly since last month, monthly mortgage payments are still significantly higher than they were a year ago.
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On Thursday, mortgage buyer Freddie Mac reported that the average 30-year rate dipped to about 6.49%, down from 6.58% last week. A year ago, the 30-year rate averaged 3.11%.
“Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore — it’s tough for them to swallow that they missed the boat on getting a high price,” Florida-based Redfin real estate agent Heather Kruayai said. .
By the time sellers realize their pricing their home too high, their property has already sat on the market for too long, Kruayai added.
Among the metros tracked by Redfin, Sacramento, Calif., had the highest share of listings, 3.6%, that were delisted from the market during the 12-week period. That’s up 1.6% from a year ago, according to the brokerage.
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However, Austin, Tex.; Seattle, Wash.; Phoenix, Ariz.; and Denver, Colo. He also saw a great deal of active listings come off the market.
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Although the five aforementioned markets surged in popularity during the coronavirus pandemic with remote workers, prices of homes skyrocketed and now “with many buyers priced out, they’re 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 much as 29.3%, according to Redfin.