US new home listings plunge 21% with higher rates spooking sellers

ONE of the biggest issues facing the US housing market is a lack of homes available for purchase. And a new report is pinning some of the blame on higher mortgage rates.

While potential buyers have been sidelined by daunting borrowing costs, sellers are also sitting out the spring season. The number of new listings in April was down 21 per cent compared to last year and plunged 31 per cent compared to 2019, according to Realtor.com.

The problem is that many potential sellers have would have to take on mortgages at much higher rates than they’re currently paying and feel “locked in” as a result, according to Danielle Hale, chief economist at Realtor.com.

Mortgage costs have surged as the Federal Reserve hikes interest rates, and have been above 6 per cent since September 2022. That’s cooled a housing market that exploded in the pandemic, with bidding wars and cash purchases pushing prices to record levels.

These days, home are sitting on the market longer as price growth slows. The number of homes under contract declined by 23 per cent this April compared to a year prior. The national median listing price, meanwhile, was US$430,000 in April, up 2.5 per cent compared to a year earlier. That was the slowest rate of growth since April 2020, according to Realtor.com. BLOOMBERG