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Browse the siteOctober 11 2022
Homebuyers have lost 29% of their purchasing power since rates bottomed out in early 2021. Home prices remain elevated due to low supply, but early demand signals weakened sharply last week.
SEATTLE -- Early indicators of homebuying demand show an accelerated pullback last week as mortgage rates shot up to a 15-year high, according to a new report from Redfin, the technology-powered real estate brokerage.
This chart was made by analyzing Freddie Mac's Primary Mortgage Market Survey. The chart assumes a 20% down payment, annual property tax of 1.25% of the purchase prices and annual insurance of 0.5% of the purchase price. (Graphic: Redfin Analysis)
Home tours fell 7% and mortgage purchase applications declined 13%. Redfin’s Homebuyer Demand Index, a measure of requests for home tours and other home-buying services, fell 6% last week to its lowest level since mid-June, when mortgage rates first jumped toward 6%.
Homebuyers have lost 29% of their purchasing power as the average 30-year-fixed mortgage rate climbed from 2.65% at the start of 2021 to 6.66% today.
"Mortgage rates well over 6% are spooking homebuyers,” said Redfin Deputy Chief Economist Taylor Marr. “Sellers are pulling back in this market, but buyers are pulling back even more. Home prices are holding steady for now. It will take a few months before the prices of closed sales start to reflect this shock to the market. However, there is evidence of sizable price declines in parts of the market that aren't accounted for by MLS data, such as home builders offloading homes in bulk at a 20% discount."
Unless otherwise noted, this data covers the four-week period ending October 2. Redfin’s weekly housing market data goes back through 2015.
View the full report, including charts, here.
About Redfin
Redfin is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.