The housing market is currently facing a “chicken and egg” problem, according to Insider, whereby elevated mortgage rates are keeping both homebuyers and sellers sidelined, which is, in turn, resulting in a dearth of for-sale inventory. As a result, those who can afford home purchases can’t find homes available to buy. Total listings of both new and existing homes are up 23.4% compared with last May, but those homes are staying on the market for a median of 43 days, which is roughly two weeks longer than they were staying on the market a year ago.
As for-sale inventory dries up and sellers remain unwilling to sacrifice their ultra-low mortgage rates to refinance in today’s high-cost market, experts say home price growth will likely slow during the months ahead.
"Based on current trends, it's possible that [home prices] won't hit the previous year's peak for the first time in our data," said Sabrina Speianu, economic data manager at Realtor.com.
Again, this comes back to still-high mortgage rates. If they remain hovering in the 6% or 7% range, home prices may eventually have to fall down to compensate. Buyers have been getting slammed by the current combination of high rates, high prices, and low inventory.