after a pandemicera homebuying frenzy the number of homes for sale nationwide saw its first annual increase since july 2019 last month according to real estate brokerage redfin which joins a growing chorus of experts predicting the housing market will continue to cool so long as interest rates keep rising—potentially helping prices fall as soon as this year housing supply rose 2 redfin reported thursday noting the number of homes for sale has risen as a result of high home prices and the federal reserves interest rate hikes which have pushed more buyers to the sidelines the average mortgage rate has jumped to 57 from less than 33 at the start of the year—adding hundreds of dollars to the average monthly payment for new mortgages and cratering demand with home sales falling nearly 16 from a year ago in june and posting the largest decline since may 2020 according to redfin the countrys economic woes have already cooled the housing market and theyre likely to continue dampening demand redfin chief economist daryl fairweather said in a statement noting the abrupt shift has already started impacting sales prices which fell 04 month to month but are still growing at 112 on an annual basis in a note to clients this month goldman sachs chief credit strategist lotfi karoui noted housing affordability has deteriorated to its worst level since at least 1996 as mortgage rates have risen adding that it will likely remain at historically challenging levels through the end of the year however he also points out a growing share of singlefamily home listings are cutting prices—particularly in the hottest pandemic markets such as phoenix and boise idaho redfin reported a recordhigh share of sellers dropped their asking prices after the feds rate hike in june reflecting mounting pressure to sell as demand suffers the party is over pantheon macro chief economist ian shepherdson says of the price cuts predicting the combination of falling demand and rising supply is likely to trigger price declines over the second half of the year as the housing market finds a new equilibrium—from a seriously stretched starting point the fed has signaled it may increase interest rates further to combat stubbornly high inflation which could harm consumer confidence and lower stock prices mean fewer prospective homebuyers can afford a down payment says fairweather advising potential sellers to do it quickly before demand falls further ​​home buying demand skyrocketed during the pandemic as interest rates collapsed and an influx of americans started working from home however the feds rate hikes have quickly spurred a reversal mortgage originations jumped from 23 trillion in 2019 to more than 4 trillion in 2020 and 2021 but demand has since plummeted to the lowest level in more than two decades the housing markets steep turnaround is already starting to take its toll on the industrys workforce earlier this week mortgage originator loandepot unveiled a plan to cut thousands of jobs and reduce costs “significantly” as the firm works to revert staffing and costs to prepandemic levels “after two years of recordbreaking volumes the market has contracted sharply and abruptly in 2022” ceo frank martell said in a statement the firm anticipates “challenging market conditions” to continue through next year and an accelerated downturn in the coming months cutting mortgage originations by roughly half this year as compared to last year redfin and compass have also announced layoffs as have the homelending departments of jpmorgan and wells fargo mortgage giant cuts thousands of jobs—warns of accelerated downturn as housing market abruptly collapses forbes