Mar 29, 2023 - Real Estate

Low inventory means limited options for would-be home buyers

A real estate sign posted on the edge of a street with "New Listing" attached to the top of the sign post. Another for sale sign is visible in background.

"For sale" signs stand in front of a house in Seattle. Photo: Mike Kane/Bloomberg via Getty Images

Seattle home buyers can expect plenty of competition this spring due to a dearth of houses on the market, according to Zillow's monthly housing report.

Driving the news: With high mortgage rates, current homeowners are unwilling to give up lower rates and are instead opting to stay put.

  • The outlook for peak spring selling season, just around the corner in April and May, remains up in the air as mortgage rates continue to fluctuate and concerns remain about the nation's monetary policy, inflation and recent bank closures.

Zoom in: In the Seattle metropolitan area, there were only 0.2% more homes for sale in March than a year ago, down just over 16% since February 2020. Other local takeaways from the Zillow data include:

  • New listings are down about 45% year over year, and down 38% compared to 2020.
  • Typical home values are $683,838, up 30% since 2020.
  • Monthly mortgage costs for a typical home (with a 20% down payment) are $3,513. That's up nearly 37% year over year.

Zoom out: Nationally, the largest annual declines in new listings are in West Coast markets: San Jose (-47%), Portland (-46%), Seattle (-45%) and Sacramento (-44%), Zillow reports.

What's next: Mortgage rates for a 30-year loan were at 6.09% in early February, and shot up to 6.65% by the end of the month, per Freddie Mac.

  • But they've dropped nearly a quarter point so far in March, which likely means more buyer activity, Axios reports.

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