![](\"https:\/\/www.floridarealtors.org\/sites\/default\/files\/styles\/full_width_main_image\/public\/page\/image\/2020-08\/gettyimages-171300298.jpg?h=65668280&itok=jkfiMZ15\")
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Higher mortgage rates may soften demand this spring. NAR has forecast home sales to slip 10% in 2022, mostly due to rising rates pricing out would-be buyers.<\/span><\/span><\/span><\/p>\n<\/div>\n SEATTLE \u2013 Higher mortgage rates may soften demand this spring as worsening affordability prices more buyers out of the market. With mortgage applications down 6% from a year ago, sellers may need to be more realistic about how much they can ask for their property. An increasing number of listings are experiencing price reductions, climbing at the fastest pace since at least 2015, according to a new Redfin survey. Still, only 3.2% of homes on the market are seeing price drops.<\/span><\/span><\/span><\/p>\n \u201cThere really is a limit to homebuyer demand, even though the market over the past few years has made it seem endless,\u201d says Daryl Fairweather, Redfin\u2019s chief economist. \u201cThe sharp increase in mortgage rates is pushing more home buyers out of the market, but it also appears to be discouraging some homeowners from selling. With demand and supply both slipping, the market isn\u2019t likely to flip from a seller\u2019s market to a buyer\u2019s market any time soon.\u201d<\/span><\/span><\/span><\/p>\n The National Association of Realtors<\/span>\u00ae<\/span><\/span><\/span><\/span><\/span>\u00a0has forecast home sales to slip 10% in 2022, mostly due to rising mortgage rates that are pricing out more would-be buyers. However, NAR still predicts home prices to rise by 5% this year.<\/span><\/span><\/span><\/p>\n For first-time home buyers, the cost of buying the same home this year compared to just one year ago has jumped by 40% \u2013 a combined impact of higher home prices and mortgage rates.<\/span><\/span><\/span><\/p>\n \u201cThere will be an inevitable slowdown in home sales,\u201d Lawrence Yun, NAR\u2019s chief economist, said recently. \u201cKeep an eye on days-on-market and a decrease in multiple offers. Home sellers should not expect big, easy profit gains.\u201d<\/span><\/span><\/span><\/p>\n Even with some early signs of cooling, the housing market remains elevated. Homes are selling at some of the fastest speeds ever, and price escalations on asking prices are still common, Redfin reports. Forty-five percent of homes that went under contract found a buyer within a week. Also, the average home sold for 2.4% above its asking price, Redfin notes.<\/span><\/span><\/span><\/p>\n\n