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For the first time in two years, homebuyers appear to be slowing their relentless pace of home purchases in the wake of rising mortgage rates, and the supply of for-sale housing is rising as a result, CNBC reports. The total supply of homes for sale rose 9% year-over-year last week, the highest annual gain since 2017, while pending home sales fell 4% from March to April.

As demand softens, sellers are seeing fewer offers and a much slower sales pace compared to the start of 2022. A long series of mortgage rate hikes is likely to continue over the coming months, meaning that despite a drop in sales activity, prices will remain high for would-be buyers in a changing market.

Sales are slowing because mortgage rates have risen sharply since the start of the year, with the biggest gains in April and early May. The average rate on the 30-year fixed mortgage started the year close to 3% and is now well over 5%.

“We used to get 10 to 15 offers on most houses,” said Lindsay Katz, a real estate broker at Redfin in the Los Angeles area. “Now I’m seeing between two and six offers on a house, a good house.”

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