The good news is that housing inventory increased for the 24th straight month in October, The not-so-good news is that that rate of inventory growth declined for the fifth straight month. Inventory grew the fastest in the West and South, followed by the Midwest with the Northeast a distant fourth.
The good news is that mortgage rates are at their lowest point in a year. The not-so-good news is that homes for sale are spending more time on the market for the 19th straight month (63 days).
Call it what you want – “golden handcuffs” or the “lock-in effect” – but the fact is that over half of American homeowners (52.5%) have a mortgage rate below 4%, well under the current rate of 6%+.
And these homeowners, whether they be empty-nesters, move-up buyers or those looking to relocate, are hesitant to give up their low rates which can cost them hundreds of dollars a month.
Finally, tight inventory keeps prices high, only exacerbating the affordability issue.
Many analysts don’t see mortgage rates falling below 6% any time soon.
September saw a 17% increase in the number of actively listed homes nationwide over the same time in 2024. This is the 23rd consecutive month of increases, however the pace has slowed over the last four months.
Housing inventory is growing the fastest in the West (21.1%) followed the South (17.9%), the Midwest (13.2%), and the Northeast (10.1%). The West and South are currently above pre-pandemic rates.
While inventory is up, pending sales (Listings under contract) remained flat.
With over 1 million homes on the market – the 81st consecutive week of inventory gains – there are now more homes for sale than any time since December 2019.
However, it worth keeping in mind that overall supply remains considerably below pre-pandemic standards, particularly in the Northeast and Midwest.
Of course, the increase in inventory means that buyers can be more selective as reflected by the increase in time on market by 5 days over a year ago.
The changes were not earth shaking but just the fact there were changes is earth shaking enough. Median home prices declined nationally from $445,000 in June to $439,950 in July a rare occurrence during a peak sales time.
Moreover, the number of homes on the market in July was 36.6% higher than July 2023, a post pandemic high.
However, actual sales remained sluggish as many would-be buyers are clearly hoping the Fed will actually cut interest rates in September.
As mortgage rates continue to drop ever so slightly, housing inventory has risen to it’s highest point since August 2020.
This represents a 6.6% increase from the same time last year and marks the 27th week in a row that inventory was higher than the previous year.
Analysts are hopeful that the declining inflation rate will bring a similar drop in mortgage rates.
The current total housing inventory (new and old listings) is up 59 percent from 2022 but down significantly from pre-pandemic levels when there were 50 percent more homes on the market.
With April traditionally the best time to sell (see “What are you doing the week of April 16-22?”), analysts – and buyers – are hopeful more homes will come on the market soon and mortgage rates won’t rise too quickly.
Realtor.com is reporting that home listings rose for the first time since June 2019 with an increase of 8 percent. While this trend is most welcome, it must be remembered that inventory is still less than half compared to pre-pandemic numbers.
Higher mortgage rates have removed some homebuyers from the market, thus giving those who remain greater choices. Andy buyers are still moving fast with homes selling a full 6 days faster than a year ago.
Realtor.com is estimating that current low levels of housing inventory will go even lower in 2020. New listings increased in January 2019 by 6.4 percent but have been declining every month since, with June seeing a decline of 2.3 percent compared to June 2018.
Analysts say there are several reasons for the low number of new listings: many baby boomers are choosing to “age in place” rather than downsizing; “rate lock”. which are homeowners who purchased their home at lower rates than are available today. Finally, there are growing concerns about the overall health of the economy.th
The latest home sales report from the California Association of Realtors should be strikingly familiar to anyone following Bay Area real estate over the last few years: prices up, inventory down.
To be specific, the median price for a single-family home in the nine-county Bay Area was $856,200 in August – an annual increase of 10.2 percent.
Eight of the nine Bay Area counties saw home prices increase from August, 2016. Only Solano County had a flat appreciation.
Inventory from August 2016 was down in all nine counties.