- Record-high monthly mortgage payments and low home inventory have made the housing market historically unaffordable.
- Home listings and homebuyer demand have also both tumbled since last year.
The housing market has never before been this unaffordable for Americans.
In an effort to combat inflation, the Federal Reserve embarked on an aggressive interest rate hiking cycle last year, tightening policy 11 times since March 2022, helping to push mortgage rates up to two-decade highs. But it's not just expensive borrowing costs that have weighed on house hunters, but also a lack of home inventory has kept prices elevated.
Combined with mortgage rates hovering near two-decade highs, and it's no why wonder so many prospective buyers have been sidelined.
These six charts from real estate group Redfin show just how brutal it is for people navigating the current market.
In the four weeks up to September 10, Redfin data shows the median monthly mortgage payment hit an all-time high of $2,632.
That's up 13.9% compared to one year ago, and it comes as mortgage rates hit 7.25% this week for the typical 30-year fixed rate.
While unaffordability climbs, Redfin's Homebuyer Demand Index is down 9% year-over-year. The measure tracks seasonally-adjusted data for requests for home tours and other homebuying services.
Compared to 2020, 2021, and 2022, the index is at its lowest point for this time of year.
The average number of active listings of homes for sale tumbled 17% in the four weeks leading up to September 10, and this measure, too, remains below any level seen in the previous three years for this time of month.
In part, this points to the home inventory shortage that's been developing for years. Economists say the snags can be traced back to the lead up to 2008, when developers built a surplus of homes that dramatically outpaced demand.
In the decade that followed, the rate of homebuilding dipped below the historical average.
New listings are down 7.1% compared to last September, and it's the smallest decline in over a year. This is partly due to new listings dropping rapidly at the same time in 2022, so the year-over-year change isn't as dramatic.
Out of the 50 biggest metros, San Jose (+6.1%) and Milwaukee (+5.7%) saw the biggest gains, while Atlanta (-29.7%) and Las Vegas (-25.2%) saw the sharpest declines.
Pending sales have declined 11.8% compared to a year ago, continuing a 15-month streak of double-digit declines. The total number of pending home sales stood at 80,655 this month.
Out of the 50 biggest metros, the cities that saw the biggest year-over-year declines included Newark, NJ (-28%), Seattle (-27.4%), San Antonio, TX (-27.1%), San Jose, CA (-25.7%), and Atlanta (-25.6%).
The median sale price climbed 3.9% compared to the same time last year in September, to $376,250.
Separate National Association of Realtors' data published last month showed that home prices saw a record increase in over half of the US housing market over the past quarter. The price for a median single-family home saw an increase in 53.8% of metropolitan housing markets.