Mortgage rates have just gone higher but homebuyers aren't giving up
May 22, 2023
Mortgage rates have just gone higher but homebuyers aren't giving up Austin
By   Margaret Heidenry
  • City News
  • Mortgages
  • interest rates
  • house purchase
Abstract: Mortgage rates are more than a percentage point higher today than they were a year ago. In addition, according to Freddie Mac, rates rose further this week to 6.39 per cent on 30-year fixed-rate loans, compared to 6.35 per cent a week ago.

These stubbornly high interest rates, combined with strong house prices, have brought the entire housing market to a strange impasse.


On the one hand, 82% of home sellers feel 'locked in' by the low mortgage rates they received a few years ago. Meanwhile, cash-strapped homebuyers, with few new listings to pique their interest, feel locked out of the American dream.


However, despite this endless real estate woes, there are some small signs of life that bode well for the coming weeks.


"While 30-year fixed mortgage rates are 1 percentage point higher today than they were a year ago, some housing indicators suggest that buyers and sellers are still actively seeking opportunities, albeit at a slower pace," notes Danielle Hale, chief economist at®, in her weekly analysis.


In our latest edition of "How's the housing market this week?" here's what the latest housing statistics mean for buyers and sellers.


The median asking price for a home in April was $430,000. However, for the week ending May 13, home prices were only 1.1 per cent higher than they were a year ago - less than half of the previous three consecutive weeks of price growth (2.4 per cent).


In effect, this means that "price growth is waning", Hale said. However, she still noted that "no significant price declines have been seen". For the moment, "sellers are still in a very strong position".

 Mortgage rates have just gone higher but homebuyers aren't giving up

Despite the fact that sellers have record equity in their homes, many are still wary of listing because it would mean trading in their low mortgage rates for higher interest rates.


As a result, the number of new listings entering the market has fallen for 45 consecutive weeks, and for the week ending 13 May was still down 25 per cent compared to a year ago.


However, this does not spell complete doom for homebuyers, as the total housing stock (both new and old) is still up 23 per cent compared to the same week last year.


According to Hale, there is more good news here: "The recent volatility in the decline of new home listings suggests that sellers are watching the market closely and looking for opportunities to maximise their profits".


In other words, home sellers are watching and waiting for the right time to open the floodgates when the time is right.


"As seller sentiment improves and the month when a large number of homes come on the market approaches," Hale predicts, "it's likely to see some improvement in new listings over the next few weeks."


In other words, buyers should hurry, as new listings will be coming on the market soon, which should help push prices down, while also offering more choice.


Homes continue to stay on the market longer than they did a year ago. In the week ending 13 May, homes were on the market for 15 days longer than last year, marking 41 consecutive weeks of longer home sales than the same week the previous year.


However, this slower pace of home sales appears to be picking up a little.


"While homes are staying on the market longer than they did a year ago," Hale noted, "the narrowing difference suggests that competition is still there."

In other words, opportunities for homebuyers and sellers still exist if they look hard enough.