Mortgage Rates Have Risen Yet Again, but Homebuyer Competition Is Heating Up

For the week ending Aug. 3, the average 30-year, fixed mortgage rate rose to 6.9%, up from the previous week’s 6.81%, and for the week ending July 29, median home listing prices also rose on a year-over-year basis. An ongoing affordability crisis is stalling a growing share of budget-conscious homebuyers, but not all are demonstrating such patience.

Home sales are on track to post their lowest annual total in more than a decade in 2023, but according to Danielle Hale, chief economist for Realtor.com, competition may actually be heating up in the for-sale market.

Skimpy listings at steep prices have also slowed the pace at which homebuyers are snapping them up: For the week ending July 29, homes spent eight more days on the market compared with this same week last year. Median days on the market has been increasing for 54 weeks straight.

Yet despite all this, Hale points out that many homebuyers are extraordinarily undeterred. The data suggests “home shoppers are looking.”

The upshot is that this more languorous pace of sales (which, by the way, is still shorter than before COVID-19) might not last for much longer.

“As we lap the 2022 housing slowdown period, this gap is likely to continue to shrink, and by fall we could even see homes selling faster than one year ago,” notes Hale. “If this happens, it could indicate that the market is finding a new normal, where homes sit on the market for fewer days than pre-pandemic, but longer than was common during the height of the real estate frenzy.”

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