(Fox Business) When mortgage rates rose toward 8% last fall, the housing market that had boomed in the pandemic era slowed to a crawl, with demand hitting the lowest level in nearly three decades.
The average rate for a 30-year fixed mortgage is now more than a percentage point lower than its October peak, fueling hopes that more would-be sellers might be willing to make a move and thereby ease the ongoing inventory shortage.
Homes in Centreville, Maryland, on Tuesday, April 4, 2023. The U.S. housing market is suffering a severe inventory shortage as many homeowners are reluctant to move. (Photographer: Nathan Howard/Bloomberg via Getty Images / Getty Images)
Although there have been a few signs that the real estate market might come back to life, fresh data indicates it is actually deteriorating further.
The Kobeissi Letter posted analysis from Reventure Consulting this week indicating that despite the drop in rates, mortgage demand fell last month to a fresh 30-year low, down 14% from a year ago and 40% from pre-pandemic levels.
Meanwhile, available home supply is still down a stunning 34.3% from the typical amount before the COVID-19 pandemic began in early 2020.
So why are more homeowners not willing to move? Maybe the question should be, ‘Why would they?’”
“Even with a drop from 8% to 6% mortgages, many homeowners have a financial disincentive to move.” The Kobeissi Letter explained in a post on X, noting that 90% of borrowers still have mortgage rates below 5%
