More Home Sellers Are Sitting Out Of The Spring Housing Market

• Buyers are flooding back into the market, mortgage rates have fallen off their recent highs, and there are still far too few homes for sale to meet demand. But potential sellers aren’t budging. New listings continued to fall in March, according to Realtor.com, down 20% from the same month last year. That decline in new listings outpaced the 16% drop posted in February. New listings in March were nearly 30% below pre-pandemic levels.
• The active inventory of homes for sale is, however, 60% higher than at the start of last spring, but that is only because homes are taking longer to sell. Inventory is also half of what it was at the start of spring in 2019 before the Covid pandemic caused an unprecedented run on housing.
• Homes are now sitting on the market for an average of 54 days, up from an average of 36 days at the start of last spring. Time on the market was longer in all of the top 50 metropolitan markets, but the greatest increases were in Raleigh, North Carolina (up 42 days), Kansas City, Missouri (up 37 days), and Austin, Texas (up 37 days). 
• Mortgage rates dropped slightly in early March due to the stress on the banking system from bank failures. They are now, however, moving higher again, although not quite as high as they were last fall.
• This could result in a housing recession, which occurs when the number of sold properties declines over a period of six months. The two main reasons that could potentially drive the housing market recession are surging interest rates and high construction costs.

(Source: CNBC)