Homebuyers Are Fed Up With High Prices

Those shopping for a home are becoming less inclined to buy amid record-high prices.

Home prices recently hit record highs, increasing 5.8% since the same time last year. High interest rates have compounded costs and driven home prices up even further by discouraging potential sellers with lower interest rates from listing their homes. This keeps the number of homes for sale historically low and pushes prices up further as buyers compete for the few options on the market.

These factors forced many would-be homebuyers out of the market, and economists have said many are biding their time for lower prices and cheaper borrowing costs. However, there are signs that buyers are fed up with high prices.

Buyers No Longer Willing to Pay High Prices

Buyers are starting to become less inclined to buy a house amid record-high prices.

Pending home sales recently hit a record low. This metric of the housing market tracks when a buyer and a seller have agreed on a price, and the low number of contracts being signed is a sign that buyers can’t keep up with rising prices, some economists said.

“Recent housing data readings suggest that buyers, sellers, and builders are in a holding pattern, waiting for home prices or mortgage rates to give before getting into the market,” wrote Realtor.com Senior Economic Research Analyst Hannah Jones.

The reluctance of homebuyers seems to have an effect. Home sellers are taking their unsold houses off the market more than ever. Some sellers compromise on the listing price.

A new survey this week by online real estate company Redfin found that for the first time since the pandemic, the typical home is selling for under the listing price during the spring busy season.