Dolly Lenz Real Estate CEO Dolly Lenz and Dolly Lenz Real Estate managing director Jenny Lenz discuss how high inflation is affecting home sales and mortgage rates on ‘The Claman Countdown.’
A record number of homes have been delisted from the market in recent weeks as buyers and sellers continue to back off amid high interest rates and soaring inflation coupled with growing fears of a recession.
According to recent data from Redfin, a record 2% of homes for sale in the U.S. were taken off the market each week on average during a 12-week period ending Nov. 20. That compares with the 1.6% of homes that were delisted during the same period one year earlier, according to the real estate brokerage.
In many cases, sellers are getting no offers for their asking price, and "sometimes, no offers at all," which is driving them from the market, according to the real estate brokerage.
There has been a huge dip in demand driven by elevated mortgage rates and home prices, Redfin reported.
While mortgage rates have dipped slightly since last month, monthly mortgage payments are still significantly higher than they were a year ago.
Residential real estate for sale sign is seen as inflation and interest rates increase Oct. 27, 2022, in Washington, DC. (Brendan Smialowski/AFP via Getty Images / Getty Images)
On Thursday, mortgage buyer Freddie Mac reported that the average 30-year rate dipped to about 6.49%, down from 6.58% last week. A year ago, the 30-year rate averaged 3.11%.
"Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore — it’s tough for them to swallow that they missed the boat on getting a high price," Florida-based Redfin real estate agent Heather Kruayai said.
By the time sellers realize their pricing their home too high, their property has already sat on the market for too long, Kruayai added.
Among the metros tracked by Redfin, Sacramento, Calif., had the highest share of listings, 3.6%, that were delisted from the market during the 12-week period. That's up 1.6% from a year ago, according to the brokerage.
For sale sign is posted in front of a single family house at Beverly Anne Street on June 13, 2022, in Las Vegas., Nev. (Bizuayehu Tesfaye/Las Vegas Review-Journal/Tribune News Service via Getty Images) / Getty Images)
However, Austin, Tex.; Seattle, Wash.; Phoenix, Ariz.; and Denver, Colo. also saw a great deal of active listings come off the market.
Although the five aforementioned markets surged in popularity during the coronavirus pandemic with remote workers, prices of homes skyrocketed and now "with many buyers priced out, they’re among the fastest cooling markets in the country," according to Redfin.
In Sacramento, for example, there was 0% annual home-price growth in October. Last spring, it was as much as 29.3%, according to Redfin.