A run-up in mortgage rates over the past several months has forced a growing number of home sellers to reconsider their plans to list, especially if it means giving up a 2% or 3% mortgage rate to refinance in a more costly market. As a result, just 392,016 U.S. homes were listed for sale in April 2023, well below the 497,844 listed in April 2022, a homebuying period notorious for its tight supply, Fortune reports.
But that hesitation from would-be sellers isn’t just affecting the supply side of the for-sale market. Every time a homeowner chooses not to list, the housing market is left with one less home for sale, meaning one less buyer making a purchase. Even without a large presence, that impact gives sellers the upper hand in today’s market.
While April 2023 saw 21.2% fewer U.S. homes go up for sale (i.e. "new listings" shown in the chart above) compared to the same month a year earlier, there are actually 49.3% more homes available for sale (i.e. "active listings" shown in the chart below) in April 2023 than in April 2022. The reason? Last year's mortgage rate spike saw homes sit on the market longer as days on market increased, which allowed inventory to pile up even as fewer homes came up for sale.
However, we're still very far from a national buyers' market. In fact, active listings (i.e. inventory) in April 2023 was 50.3% below levels seen in April 2019.