Sales are slowing because mortgage rates have risen sharply since the start of the year, with the biggest gains in April and early May. The average rate on the 30-year fixed mortgage started the year close to 3% and is now well over 5%.
Katz worked with Alexandra Stocker and her husband to sell their home. The Stockers were already worried that the red-hot housing market was suddenly chilling. For example: In May 2019, a buyer purchasing a $300,000 home with a 20% down payment and a 30-year fixed mortgage would get an average interest rate of around 4.33%. The monthly payment of principal and interest would be $1,192. In 2020, that same house was 5% more expensive, but mortgage rates fell to 3.41%, so the monthly payment actually dropped to $1,119.By 2021, the monthly payment was only up about $100. This month, with prices rising another 21%, and mortgage rates surging to around 5.
"I met with sellers in February who are going to sell in June, and it's a very different conversation in February than it will be in June because the market has completely changed," said Katz.
Not unless they start making more house supply / demand