If you want to buy a home, you better be ready to act quickly: Houses are selling at a record-breaking pace this spring, even as prices keep getting more expensive.
The typical home on the market sold in just 15 days during the four-week period ending on May 8, according to data released last week by real estate brokerage Redfin. That’s the fastest pace since Redfin started tracking this data in 2012.
Perhaps unsurprisingly, the period when homes sold at this blistering pace also coincides with the ideal time to list a home, according to Realtor.com.
“Sellers listing in mid-April can expect to find relatively high buyer interest, coupled with limited competition from other sellers, that equates to fast-selling homes at top dollar,” Danielle Hale, Realtor.com’s chief economist, said in a March news release.
Rising mortgage rates and few homes for sale
The latest round of speedy home sales happened even as the cost of ownership rose. Mortgage rates have been soaring, hitting 5.30% last week — their highest level since 2008. The median home price is up 17% on an annual basis, according to Redfin, and the typical monthly mortgage payment has risen an eye-watering 44% over the past year to $2,427.
As owning a home becomes increasingly expensive, you might expect the market to cool off as some buyers get prices out of the market. But instead, Redfin’s report suggests that buyers remaining in the market are “rushing to snag homes before they become even more expensive.”
Even though rising rates have already “taken a notable bite out of demand,” Redfin Chief Economist Daryl Fairweather said, “homebuyers who remain in the market are facing stiff competition, especially for the most desirable homes.”
No wonder a significant majority of Americans now say it’s a bad time to buy a house.
Fairweather attributes the stiff competition in the market to an ongoing shortage of inventory. “It would take a much larger drop in demand for buyers to really feel like the market has truly turned in their favor,” she said.