According to Freddie Mac, interest rates on 30-year fixed-rate mortgages averaged 6.57 per cent for the week ending 25 May. This is a significant increase from last week's 6.39 per cent. If that wasn't worrying enough, Mortgage News Daily raised the average 30-year fixed rate to 7.12 per cent on Thursday afternoon.

The figures are a cruel turn of events as they come at a time when house prices seem to be drifting back to earth.

"In her latest analysis of housing data for the week ending May 20, Danielle Hale, chief economist at Realtor.com®, noted, "The recent momentum has home prices trending below year-ago levels in a matter of weeks." But while many homebuyers would certainly welcome a lower price tag, higher mortgage rates could minimise or eliminate any potential savings."

When will homebuyers get a break? When will homeowners decide to take the plunge and become sellers? Here's what this issue of "How's the housing market this week?" of the latest real estate statistics seem to be saying something.

In April, the median price of homes for sale was $430,000. However, in the week ending May 20, listing prices increased by just 0.7 per cent compared to a year ago.

Home price gains have been shrinking and Hale is not the only one who expects home prices to fall below year ago levels soon. Freddie Mac's economic team predicts a 2.9 per cent drop in national house prices over the course of 2023.

Of course, as Hale points out, all real estate is local; no one is buying "national" houses.

Prices are still more affordable in the Midwest and Northeast, but they are increasing by double digits as these markets heat up. Meanwhile, prices in the West and South, which increased exponentially during the COVID-19 pandemic, are now moderating or even declining.

The housing market as a whole would benefit if more homeowners decided to put their homes up for sale, but few seem willing to volunteer.

In the week ending 20 May, the number of new homes on the market fell by 26% compared to the same period last year. Compared to 2022, almost a full year's worth of listings are now down, largely due to soaring mortgage rates.

"With about two-thirds of existing homeowners having mortgages that are more than 2 percentage points lower than current mortgage rates," Hale said, "it's easy to see why new listings are lagging."

Admittedly, overall inventory (including new listings and older listings that have been languishing) is up 20 per cent from last year. But the fact that many of these listings are dated suggests that buyers have opted for these dilapidated homes and passed.

And the slowdown in sales suggests that enthusiasm for home buying is waning.

In April, the median time a home stayed on the market was 49 days. And in the week ending May 20, listings spent an extra 15 days on the market compared to the same week last year.

Will homebuyers get relief from interest rates any time soon? Most signs point to an unlikely scenario.

Just over a month ago, some economists predicted that mortgage rates would fall later in the year. But now, economists in the housing sector are not so sure. They are now predicting a scenario in which "long-term interest rates move largely sideways, remaining in a similar range to today's rates, perhaps moving up or down by about half a percentage point."

However, despite the gloomy outlook, determined buyers are finding ways to navigate today's dismal market. Some are sifting through stale listings and selling at lower prices. Others are exploring a whole new possibility they may not have considered before: new construction homes.

"While existing home sales have weakened in recent months, new home sales have increased," Hale says." Buyers who are struggling with low inventory are using new construction as a valve of relief."

Given that builders can sometimes offer great mortgage rates through preferred lenders, new construction may even be priced lower than original homes in some areas today. This should give hope to all homebuyers that they can find the right home if they continue to look and leave no stone unturned.