Historically, the summer months typically bring our highest inventory levels of the year in the Puget Sound market, but the story being written this year is not one that repeats history. As mortgage rates began a speedy climb last year, we saw an expected move to the sidelines for many buyers and a sharp decline in pending sales. At the same time, inventory levels were contracting as they typically do during the winter months. But 2023 is playing out differently than previous years as we welcome the summer sunshine.

Typically, we would see inventory climb throughout the spring and reach peak levels in July or August, yet that's not happening. At the same time, and to the surprise of many, pending sales began to take off again even though mortgage rates haven’t pushed downward.

You'll notice the orange line in the graph below (pending sales) quickly rebounded early in the year and has continued to trend upward, for the most part. At the same time, listing inventory (in blue) is lagging behind. Even with rates nearly twice what they were early last year, the buyers are still out in force, yet the supply of available homes has not increased as it typically would during this time of year.

What's going on? As much as the higher interest rate environment influenced buyers and their purchasing power, it's becoming quite clear that inventory is remaining low because many would-be sellers are deciding to stay in their house with a 3 or 3.5% mortgage vs. selling and buying a new one at 6.5-7% rates.