Housing Market Update: Buyers Get Good News

Buyers looking to purchase property are seeing more listings, according to data from the real estate platform Redfin, even though they may struggle to afford a home amid high mortgage rates and elevated prices.

Sellers are increasingly putting their houses in the market with listing up 10 percent from a year ago for the week ending February 18, the biggest jump in two months, Redfin said.

That's the good news.

But the less encouraging development is that mortgage rates have jumped into the 7 percent territory recently after falling earlier in the year from its two-decade peak they hit in the fall. Meanwhile, prices are up 6 percent, the largest acceleration since October 2022. Economic conditions that suggest that borrowing costs may stay elevated for a little longer is behind the jump in home loan costs, experts say.

Real estate agents are tempering sellers' expectations, suggesting to them that they should think of offering incentives to attract buyers amid a tough a housing market.

"I tell every one of my sellers to have an open mind and put on their buyer's hat. Nine times out of 10, buyers are asking for a concession in their initial offer right now–and usually the seller needs to accept it to seal the deal," Shauna Pendleton, a Redfin Premier agent in Boise, said in a statement.

She added: "The most common concession buyers are asking for is a mortgage-rate buydown. Requests for sellers to cover the closing costs are also common. I most often see buyers ask for concessions for more affordable homes–anything under $500,000 here in Boise–but I see some concessions on expensive homes, too."

The 30-year fixed rate mortgage hit 7 percent for the week ending February 16, according to lenders, contributing to plummeting applications for home loans.

"Mortgage rates eclipsed the 7 percent mark for the first time since December 2023, as higher than anticipated inflation readings put upward pressure on rates," the Mortgage Bankers Association said in a statement shared with Newsweek. "Mortgage applications decreased for the second consecutive week, with purchase and refinance activity both posting declines."

Meanwhile, Redfin points out that its Home Buyer Demand Index, which tracks tour requests and other home buying services from its agents, was down 15 percent compared to a year ago.

While more listings suggests that buyers may see more options for them in the market, but prices are still proving a deterrent. The median sale price of a home was up close to 6 percent to about $365,000 while the asking price was also 5.6 percent higher to nearly $400,000. Pending sales meanwhile were down by nearly 7 percent.

Some cities in Florida and Texas are seeing heightened activites include Jacksonville that saw a 33.5 percent jump in new listings, followed by Dallas, at 33 percent while Fort Worth noted a 36 percent increase. Fort Lauderdale registered a 25 percent jump in listings while Austin was 22.6 percent.