Report finds buyers are backing off from buying second homes, but what’s causing the turnaround?

Surging mortgage prices deterring more buyers

With fewer people putting their homes on the market, prices continue to skyrocket.

The decrease comes as interest rates continue to climb, according to the Mortgage Bankers Association. 

“Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale.” — National Association of REALTORS® chief economist Lawrence Yun  

Housing inventory should reach pre-pandemic levels by the end of 2024, according to the results of Zillow’s latest Home Price Expectations Survey. More than 100 market experts and economists weighed in to predict upcoming trends.

Affordability and supply-chain issues continued to weigh on the sales of new single-family residences.

The median existing-home price for all housing types in February was $357,300, up 15% from a year before, as median prices rose in each region.    

“More groundbreaking is welcome news for a supply-starved housing market.” — First American deputy chief economist Odeta Kushi 

The measurement of six-month sales expectations among homebuilders took an especially negative turn in March, according to the National Association of Home Builders. 

“Investors are weighing the impacts of rapidly increasing inflation in the U.S. and many other parts of the world against the potential for a slowdown in economic growth due to a renewed bout of supply-chain constraints.” — MBA associate vice president of economic and industry forecasting Joel Kan

Of the homes that went under contract during the four weeks ended March 6, 58% had an accepted offer within the first two weeks of going on the market, and 45% had an accepted offer within just one week, Redfin reported.

Foreign buyers accounted for less than 2% of U.S. residential real estate transactions last year, and Russian buyers accounted for less than 1% of those, the National Association of REALTORS® reported. 

“Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates.” — MBA associate vice president of economic and industry forecasting Joel Kan 

Homeowner tenure has flattened since its 2020 peak.

Demand has been trending up since the beginning of the pandemic.