Mortgage rates fell this week as a rush of fresh listings hit the market.

The average rate for a 30-year fixed home loan dropped from 6.87% to 6.79% for the week ending March 28, according to Freddie Mac.

“Mortgage rates moved slightly lower this week, providing a bit more room in the budgets of some prospective homebuyers,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Regardless, rates remain elevated near 7% as markets watch for signs of cooling inflation, hoping that rates will come down further.”

Homebuyers intimidated by the ups and downs of mortgage rates do have some good news to celebrate right now: For the week ending March 23, more new listings hit the market than a year earlier. 

“The growth rate of 14.9% remains among the fastest increase rates in new listings since June 2021,” says Realtor.com® economist Jiayi Xu in her most recent analysis. “As the number of fresh listings continues to grow, homebuyers this spring have a wider array of options compared to this time last year.”

Home shoppers will need to weigh whether these fresh listings are enticing enough to get out there and brave today’s rates. Now that the spring housing market is officially underway, here’s what these and other recent real estate market statistics mean in this installment of “How’s the Housing Market This Week?”

The mortgage rate problem

Last week, the Federal Reserve held benchmark interest rates steady rather than lowering them, based on stronger-than-anticipated economic reports. While the Fed signaled it expected to cut interest rates three times before the end of the year, economists are predicting a period of what’s known as “higher for longer” in monetary policy.

In a nutshell, the phrase means the Fed’s benchmark borrowing rates—and likely mortgage rates—are expected to remain elevated for an extended period.

“While the Federal Reserve Bank doesn’t directly set mortgage rates, the prevailing high policy rate environment has resulted in increased borrowing costs across various sectors, including mortgages,” explains Xu. 

As mortgage rates rise, more homebuyers might put their home-shopping plans on hold. 

“With mortgage rates fluctuating between the 6.5% to 7% range since the start of the year, many homebuyers may opt to delay their purchasing plans in anticipation of lower rates,” explains Xu.

Home prices remain flat

While mortgage rates have fluctuated week to week, home prices have kept steady for the week ending March 23.

In fact, the week ending March 23 marks two weeks in a row when the annual price change was 0% compared with the same period last year. (The median price of a home was $415,500 in February.)

In addition to home prices stagnating, more home sellers are slashing their listing prices. 

“We have seen that the inventory share of price reductions in February increased by 1.4 percentage points compared to the previous year,” says Xu. “And this pace of increasing price reductions has continued into the first few weeks of March.”

Home inventory is making a comeback

In addition to fresh listings being up annually, overall active inventory—a combination of old and new listings—jumped an astounding 25.5% for the week ending March 23. 

This week marks 20 weeks in a row that the total number of homes for sale is up year over year. 

Home shoppers in the South saw the largest gain in listings, “particularly in the more affordable under-$350,000 price category,” says Xu. 

The beginning of March has also seen inventory growth in the Midwest and West. 

“Additionally, the increased listings might put some downward pressure on prices, offering relief to homebuyers,” says Xu.

Homes are selling quickly

Some home sellers might still feel “locked in” to their low mortgage rates. Yet sellers ready to move should start getting their homes ready for showings to compete among the influx of new listings.

For the week ending March 23, the typical home spent one less day on the market than it did this same week last year. (Homes spent an average of 61 days on the market in February.)

“While inventory has grown notably compared to last year, homes are still selling relatively quickly, likely because inventory levels are still significantly lower than pre-pandemic times,” says Xu.

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