GlobeSt.com

Buyers are pulling back more than sellers, according to a new report from Redfin, as housing players assess rising mortgage rates, increased inventory and a cooling market.

“Sellers are holding back because they realize they won’t get the bidding war they would have gotten six months ago,” Redfin deputy chief economist Taylor Marr said in a release.

“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.”

Housing inventory is increasing, but the pace of growth has slowed in recent weeks, according to Bill McBride, author of the Calculated Risk blog. The pace slipped to 28% above one year ago, Realtor.com reported.

Big Drop in New Listings

Redfin showed that new listings of homes for sale suffered their steepest decline since June 2020, dropping 12% year over year during the four weeks ending Aug. 7.

Added Marr, “Despite the decrease in new listings, overall housing supply continues to grow—a sign that homebuyers are pulling back more than home sellers. The total number of homes for sale is up 4% year over year. That’s good news for the buyers who can afford to remain in the market because it means the housing shortage is easing, and there are more homes to choose from.”

Volatility in mortgage rates ensues with 30-year rates rising to 5.22% for the week ending Aug. 11. Recently, that rate slipped below 5%.

The share of people who believe now is a good time to sell is rapidly declining, according to the latest Home Purchase Sentiment Index from Fannie Mae.