Buyers ‘Frustrated’ By ‘Lack of Homes For Sale’
Looks like new homes are creeping back into the market with a boost in home seller confidence, translating into a near recovery edging back up to levels seen last year, according to Zillow's Weekly Market Report.
That said, however, the new supply is being outpaced by buyer demand as newly pending sales, fueled partly by mortgage rates that tumbled this week even more substantially, have spiked; big, in year-over-year numbers.
From the same week last year, newly pending sales ticked up 16.5%. The catalyst? Strong buyer demand rolling in the late summer—the largest year-over-year hike since mid-February, prior to COVID-19.
And the running shoes were firmly affixed; last week, typically, home sellers who accepted an offer did it after 13 days. That’s 13 days faster than a year ago.
In order of market size, New York/Newark, NY/NJ had a total of 41.5% in Newly Pending Sales -YoY, followed by Los Angeles, 3.8%; Chicago, 40.1%; Dallas-Fort Worth, 21.7%; and Philadelphia, 25.1%.
A potential signal that sellers are belatedly hitting the market as home-shopping seasons stretches later in the year than usual? New for-sale listings plummeted 10.6% over year last week—the most narrow gap since late March.
Meantime, now that the time’s right to sell a home, confidence is blossoming, according to Fannie Mae’s National Housing Survey. That perspective was mutual among 45% of respondents last month, a hike of 41% in June and a recent low of 29% in April.
In light of the pace of pending sales, though, the total for-sale inventory further sagged below the level of last year. As of last week, compared to a year ago, 28.9% fewer homes sat on the market.
Compared to a year ago, the median U.S. list price is $345,255, which is higher by 8.3%--the largest annual change since the week ending July 13, 2019.
On the heels of an announcement by the Federal Housing Finance Agency of a delay in its new 0.5% fee on some refinances, there was a drastic midweek tumble in mortgage rates listed by third-party lenders on Zillowii. The Adverse Market Refinance Fee, which applies to all mortgage refinances serviced by government entities, will be delayed from September 1 to December 1.
Federal Reserve Chairman Jerome Powell also formally announced a policy shift that, in some cases, will allow for higher inflation. That’s expected to keep interest rates low for a sustained period. The immediate impact on mortgage rates will likely be negligible. Furthermore, it’s possible that, longer-term, this actually steps up mortgage rates depending on factors like the pace of the economic recovery.
June wound down with the housing market on somewhat shaky ground, with pending sales having pulled back slightly as summer nears, revealed Redfin data, recently.
Additionally, new listings dipped 8% from this time last year. Even with near-record low rates, however, those applying for mortgage applications decreased by 2% from the prior week.
Redfin Houston agent Irma Jalifi commented on the current shortage: “Homebuyers are becoming frustrated because they’re just not seeing a lot they want to buy. The lack of homes for sale has caused two of my buyers to just give up when they had been trying to find a home before their leases were up at the end of July. It’s disappointing to spend so much time and effort and come up empty-handed.”