Rising mortgage rates are tipping the scales in favor of buyers. Sellers are losing the upper hand as the market starts to become more balanced, but it comes at a price, according to a new Redfin report.

Buyers are paying higher monthly mortgage payments as mortgage rates continue to climb. That shift is evident in the change in available home supply which has climbed rapidly as mortgage rates spiked to 6%. The months supply of homes increased to 2.9 months, the highest it’s been since July 2020. 

But that doesn’t mean supply will continue in that trajectory. According to the report, sellers are reluctant to put their homes on the market so inventory is falling. 

Redfin deputy chief economist Taylor Marr says today’s homebuyers have more power than they’ve had in a while, but unfortunately it’s becoming increasingly hard for them to make use of that power due to affordability pressures associated with rising mortgage rates. 

“A true buyers market would have more homes for sale than there are buyers, with a wide variety of homes for sale by style, price, and location so when a buyer finds the home that matches their preferences they face little competition and can offer under asking price with healthy inspection and financing contingencies in place,” Marr said. “Today’s average buyer is paying less than the list price, but they continue to struggle to find a home that meets their criteria and budget.”

Redfin found fewer Google searches for “homes for sale” during the week ended Sept. 10, down 26% from last year. Its Homebuyer Demand Index, which measures requests for tours and other services, was down 11% from last year. 

Mortgage applications were up 0.2% week over week but down 29% from last year as the 30-year mortgage rate rose to 6.02%, the highest level since November 2008.

In the four weeks ended Sept. 11, active listings fell 1.7% from the prior month, but rose 3% from last year. The median asking price rose 8% from 2021 to $380,725. Meanwhile, the median sale price increased 7% year over year to $371,748.

New listings had their biggest decline since May 2020, falling 19% from last year, while active listings were down 1.7% from the prior four weeks, but up 3% from 2021. 

​​Thirty-four percent of homes that went under contract had an offer within the first two weeks, with little change from the previous four weeks but down from 41% last year. Thirty-four percent of homes sold above list price, down from 48% last year.

The report also noted the monthly mortgage payment on a median asking-price home was $2,385 at the current 6.02% mortgage rate. That was up 42% from last year’s $1,674 when mortgage rates were 2.86% and down from June 19th’s peak of $2,460.