Re/Max CEO: Home prices can't keep up double-digit gains

LOS ANGELES (AP) — The U.S. housing market is slowing as would-be buyers struggle with rising borrowing costs and a persistent shortage of properties for sale.

Previously occupied home sales fell in February and March as mortgage rates shot up, crimping homebuyers’ purchasing power during the annual spring homebuying season.

The average weekly rate for a benchmark 30-year mortgage slipped last week to 5.25% from 5.3% the previous week, which was the highest level since 2009, according to mortgage buyer Freddie Mac. A year ago the average rate was 3%.

Nick Bailey, president and CEO of Re/Max, a global network of independently owned and operated real estate brokerages with about 3,300 locations in the U.S. alone, recently spoke to the Associated Press about the impact rising mortgage rates will have on the housing market this year, from less competition among home buyers to more muted selling price increases.

The interview has been edited for length and clarity.

Q: What impact is the surge in mortgage rates this year having on the housing market?

A: The number one thing it has done is it’s started to help price appreciation stabilize a bit. Obviously, the big talk the last couple of years is how much home prices have increased with most markets across the country in some level of double-digit growth. I think the rise in interest rates is going to help buyers not be in as strong a competitive bidding situation as they have in the past. I think it will stabilize pricing and overall help the market return to a little bit more of an equilibrium, which I think is needed. The market could not continue to go up by double-digit price appreciation year after year after year.

Q: One thing that could help buyers is more homes on the market. Are you concerned that homeowners with...