The Federal Reserve’s ambitious efforts to combat rising inflation seem to be working as soaring mortgage rates cause a growing number of buyers to hold off on home purchases in a less competitive spring market. Sixty-five percent of home offers written by Redfin agents faced competition on a seasonally adjusted basis in March compared to 66.7% in February, marking the first month-over-month decline since September, Redfin reports.
Though bidding wars are still common in most home purchases, buyers are likely to face fewer competing offers in the coming months, but those who have already been priced out can expect no relief from a worsening affordability crisis.
“March was the first month in two years that I had a weekend with zero house tours. People are getting priced out,” said Maria Giron, a Redfin real estate agent in the Bay Area. “Some buyers are in shock and dropping out altogether. Others are looking at more affordable options like smaller homes or neighborhoods that are farther out. The buyers I’m working with who are most sensitive to the rise in mortgage rates are first-time buyers looking for homes in the $500,000 to $700,000 range.”
Giron continued: “Homes are still getting multiple offers, especially in desirable areas, but those in other areas are now seeing fewer offers than they were a couple of months ago.”
Related Stories
Affordability
As the Housing Market Loses Steam, a Growing Number of Sellers Are Dropping Their Asking Prices
The Fed's most recent mortgage rate hike is putting a damper on home sales, and in order to attract remaining buyers, sellers are increasingly slashing their asking prices
New-Home Sales
The 10 Hottest Housing Markets Seeing the Fastest Home Sales
Jackson, Mississippi tops the list of the 10 cities where homes are flying off the market the fastest, followed closely by other southern metros and a few northeastern hotspots
Market Data + Trends
Rising Real Estate Listings Signal Strong Post-Pandemic Recovery for the Housing Market
As demand softens, a resurgence of home listings sets the stage for the housing market's post-pandemic rebalancing
