Fed’s Action Likely Will Make Make Housing Less Affordable, Less Available
The number of net new listings on the market declined 12% from April 2021.
In April, net new housing inventory remained negative, creating more affordability issues for many prospective buyers.
That trend comes from this week’s Market Pulse report from national brokerage HouseCanary, covering 22 listing-derived metrics and comparing data between April 2021 and April 2022.
The report said that continued speculation about the Federal Reserve’s upcoming plans (it raised interest rates by 50 basis points on Wednesday) is affecting home prices and home-listing volumes.
The Fed’s action comes after a sustained period of historically low interest rates.
Jeremy Sicklick, co-founder and CEO, HouseCanary, commented in prepared remarks, “We think many housing market participants have already priced in the effect of near-term rate hikes. For starters, we have seen a sharp rise in mortgage rates this year, including the 30-year fixed mortgage rate, which has increased by 200 basis points since January.
“Rising rates, together with already bloated prices, have made for a difficult buying environment as they increase the cost of home ownership, but could also dissuade prospective sellers from listing their properties in the current market.”
Sicklick said he expects continued limited new supply coming onto the market over the next couple months, leading to sustained upward pressure on prices.
“But looking ahead to the end of 2022, we do see room for the market to ultimately moderate,” he said.
Home Listings at $200,000 and Lower Down 21.7 for the Year
Since April 2021, there have been 3,187,324 net new listings placed on the market, which is a 1.5% decrease versus the 52 weeks prior with nearly 40 percent of them in the $200,000 to $400,000 price range.
Listings in the $200,000 and lower range are down 21.7 for the year. For the month of April, new homes listed that were priced at $200,000 or less fell by 25.3%.
Monthly net new listing volume for single-family detached homes was down 7.6% compared to April 2021.
In April, there were 326,455 net new listings placed on the market, representing a 12% decrease year-over-year.