Mortgage rates soared even higher this week, averaging 6.79% for a 30-year fixed-rate home loan as of Thursday, according to Freddie Mac. That’s a significant jump from last week’s rate of 6.57%.

As if that weren’t enough to make homebuyers’ hearts skip a few beats, many are finding very few fresh listings on the market—and the few that are for sale are mobbed with desperate buyers, despite high rates. 

“Limited inventory levels [have resulted] in intense competition for fresh listings, adding to the budgetary pressures faced by prospective homeowners,” according to Realtor.com® Chief Economist Danielle Hale in her recent analysis of housing data for the week ending May 27. Sound familiar? 

Here’s a breakdown of what the latest real estate statistics mean for buyers and sellers in our column “How’s the Housing Market This Week?”

The fight for fresh listings

It’s been 47 weeks and counting that newly listed homes have been on a downward trend compared with the previous year.

For the week ending May 27, the number of new listings was down 20% versus the same time last year, creating what Hale calls a “drag on home sales.”

And anyone eyeballing the mortgage rates of late will understand why sellers are staying put.

“Existing homeowners, benefiting from mortgage rates considerably lower than current rates, are reluctant to list their properties, leading to a lag in new listings,” explains Hale. 

Although new listing levels have plummeted, overall housing inventory (which also includes stale listings lingering on the market) is up by 18% over last year for the week ending May 27. 

Homebuyers who are desperate enough to give these old listings a second look could stand to land a deal, although it may not be the ideal dream home they’d been hoping for. 

Where home prices are cooling—and heating up

Home prices rose to a national median of $441,000 in May, up from April’s $430,000. But the glimmer of good news in this data is that prices seem to finally be leveling off.

Home prices tend to peak in June, then begin a descent toward the holidays. Plus, the median listing price grew by just 0.8% for the week ending May 27 compared with last year. 

“Home price growth ticked up slightly this week but still at a crawl,” says Hale. 

That said, these national numbers hide vast differences depending on where you live. If you call the South or the Western U.S. home, you likely saw median home listing prices grow by low single digits over one year ago. Yet those looking to settle down in the Northeast will find that median listing prices saw double-digit growth for the same time period.

Median home prices in the Northeast are rising because many markets there are relatively affordable.

“And affordable housing markets remain in high demand, experiencing notable price growth as buyers flock into regions that still offer realistic opportunities for homeownership,” says Hale.

Why homes are taking longer to sell

In May, homes lingered on the market for a median of 43 days. And for the week ending May 27, listings spent an extra 13 days on the market compared with this same week last year.

For 45 weeks, it’s taken longer to sell a home compared with the same week one year ago, with the gap exceeding two weeks since January. 

Despite that, May’s data reveals that homes were snapped up quicker than the average May from 2017 to 2019.

So while the red-hot market sparked by record-low mortgage rates has cooled, “homes are still selling faster than the pre-frenzy norm, emphasizing the persistent supply-demand imbalance,” says Hale. 

Where homebuyer bargains are hiding

Mortgage rates don’t seem poised to plunge anytime soon. And high home prices mean buyers will shell out more in mortgage costs, averaging $280 extra per month if they make a 20% down payment.

With high prices and fewer listings on the horizon, how can buyers push past the market malaise and snag a home? The solution for many might come in the form of new-construction homes, says Hale.

“In fact, the falling prices of new homes are making them even more appealing as affordability remains important for constrained buyers, resulting in an uptick in new-home sales,” says Hale.

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