Not only are builders slowing new-home production, but home sellers are also becoming more hesitant to list their properties as buyers delay their home searches in a market cooldown. Nonetheless, overall housing supply is still on the rise, Redfin reports. New for-sale listings fell 12% year-over-year during the four weeks ending August 7, while pending home sales are down 16% from a year ago, but the total number of homes for sale is up 4% year-over-year.
Increasing supply creates more purchasing opportunities for those who can still afford for-sale list prices, but more buyers are also being priced out by elevated borrowing costs and a median $379,089 home sale price.
“Buyers are backing off due to rising housing costs and sellers are holding back because they realize they won’t get the bidding war they would have gotten six months ago,” said Redfin Deputy Chief Economist Taylor Marr. “The good news is this is bringing balance to the market. If mortgage rates resume their downward trajectory, more buyers and sellers could get back in the game.”