Home Listings Suddenly Jump as Sellers Worry They May Miss Out on the Red-Hot Housing Market

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With home sales slowing and mortgage rates rising, home sellers are starting to worry that the red-hot housing market is over.

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.

 

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