The median mortgage payment in the United States hit a new record high of $2,894 per month, for May 2024

The median mortgage payment in the United States hit a new record high of $2,894 per month, for May 2024.

New listings rose 9% year over year, marking the smallest increase in three months (excluding the four weeks ending March 31, 2024, when there was an artificially small decline due to Easter). The number of new listings during the four-week period ending May 5 was lower than any comparable period on record except for 2020 and 2023. Many potential sellers decided not to list their homes as rates increased throughout April, opting to stay put to keep their low mortgage rates.

Home sales fell due to high rates and low supply

Pending home sales dropped 3% from a year earlier, the largest decline in two months. There are also signs that competition for homes is slowing during a season when it typically picks up: 30% of homes sold above asking price, flat from a week earlier, down from 32% a year earlier, and significantly down from more than 50% two years ago. Additionally, 6.2% of home sellers reduced their asking price, the highest share since November, up from 4.3% a year ago. However, there is one sign that demand is beginning to increase: Mortgage-purchase applications rose 2% week over week.

Recent economic news brought rates down from their peak

Positive economic news pushed daily average mortgage rates down from a five-month high of 7.5% on April 30 to about 7.2% at the end of last week and into this week, giving buyers some relief. The Federal Reserve held interest rates steady and left open the possibility of a rate cut later this year at their May 1 meeting, and last Friday's weak jobs report was another positive indicator.

"The market is a mixed bag, with high mortgage rates causing some listings to sit longer than I would expect in the springtime and high prices holding steady," said David Palmer, a Redfin Premier agent in Seattle. "Sellers can rest assured that there are plenty of motivated buyers who are jumping into the market now; they finally understand that rates aren't going to plummet anytime soon. Those buyers are the people who are moving because they need to: They're relocating for a new job, going through a divorce, or growing their family. So even though some of my listings are taking longer to sell than they would in a typical spring market, they are selling eventually."