Homebuyers are starting to revolt over steep prices across US

The increase in home listings in the US housing market can be attributed to several factors. One significant factor is the higher-for-longer mortgage rates, which are discouraging potential buyers and causing some sellers to reduce their asking prices. As a result, more homes are staying on the market for longer periods, leading to an increase in listings. Additionally, the economic conditions and the Federal Reserve's monetary policy have played a role in shaping the housing market dynamics. The lack of interest rate cuts has diminished hopes for a significant reduction in borrowing costs, which has further impacted the demand for housing.

Another factor contributing to the rise in home listings is the varying regional market conditions. Some areas, particularly in the Sun Belt, which experienced a boom during the pandemic, are now seeing a cooling-off period as people are priced out of the market. In contrast, some metros in the West, such as Seattle and the San Francisco Bay area, have already begun to recover from the market corrections experienced in late 2022.

The growing inventory of unsold homes is also contributing to the increase in home listings. With mortgage rates hovering near 7% since mid-April, many potential buyers are being priced out of the market, causing a decline in sales of both new and existing homes. As a result, listings are accumulating, and sellers are increasingly cutting their asking prices to attract buyers.

Lastly, the ongoing imbalance between housing supply and demand is playing a role in the rising number of home listings. While there has been an increase in the supply of homes, demand has not kept pace due to factors such as high home prices and mortgage rates. This has led to an accumulation of listings, particularly in areas where there is a significant mismatch between supply and demand.

High mortgage rates around 7% have significantly influenced the affordability and willingness of potential homebuyers in several ways:

1. Increased monthly payments: Higher mortgage rates lead to higher monthly payments for homebuyers, making it more difficult for them to afford a home. This has resulted in some potential buyers being priced out of the market, especially first-time buyers with lower down payments and less robust credit history.

2. Decreased purchasing power: With higher mortgage rates, buyers' purchasing power is reduced, meaning they may have to look for lower-priced homes or compromise on their wish list to afford a home. This can lead to increased competition for affordable homes, driving up prices in that segment of the market.

3. Reduced demand and sales: The higher mortgage rates have led to a decrease in demand for homes, as some buyers are either priced out or decide to wait for rates to come down. This has resulted in a drop in home sales and an increase in the number of unsold listings.

4. Adjustment of expectations: Homebuyers and sellers are having to adjust their expectations, with sellers potentially needing to lower asking prices and buyers needing to reconsider their budgets and preferences in the face of higher borrowing costs.

5. Impact on the broader economy: The higher mortgage rates and reduced affordability of homes have a broader impact on the economy, as the housing market is a significant driver of economic growth. A weaker housing market can lead to reduced consumer spending, lower job growth, and slower overall economic growth.

In summary, the high mortgage rates around 7% have negatively impacted the affordability and willingness of potential homebuyers, leading to adjustments in the housing market and broader economic consequences.