What this Week’s Data Means:
After dipping during Thanksgiving week, newly listed homes rebounded rapidly last week but were still less than year-ago levels. As a result, the hallmarks of a competitive market persist even as some indicators moved in a buyer-friendly direction. Typical asking prices rose 9.0%, and homes sold 9 days faster than this time last year. The number of homes for sale remains lower than this time last year, but the gap narrowed slightly this week to 26%.
Looking forward, the covid-19 omicron variant could extend existing housing trends. Any impact is likely to be temporary and small, and similar to the delta variant’s effect concentrated on sellers. According to Realtor.com® 2022 Housing Market Forecast and Predictions, housing inventory in next year is likely to be slightly improved but remain scarce (up 0.3% year-over-year), prices will stay high, but the growth in them will slow (up 6.6% year-over-year), and the popularity of the suburbs will endure.
- The median listing price grew by 9.0 percent over last year. After an early-September uptick, home price growth has shifted back into the high single-digit territory and displayed consistency. Price appreciation is solidly confined in a narrow band, rising at 9.0% this past week compared to last year’s double-digit pace. Home prices continue to rise due to a mismatch between supply and demand, stemming from a decade-long shortage of homebuilding. This means that housing affordability will be an increasingly important consideration for buyers, but with rents rising by 18.5%, buying may be the relatively more affordable housing option for some.
- New listings–a measure of sellers putting homes up for sale–were down 1 percent from last year. After the drop during Thanksgiving week, the number of new listings climbed back on track but continues to fall just short of what we saw at this time last year. With fewer than half as many homes actively for sale now compared to 2 years ago, the availability of for-sale homes is an ongoing challenge and a potential limiting factor. However, an improvement could be on the horizon, with more homeowners planning to sell in the next 6 months and single-family home construction continuing at a 1 million+ pace.
- Active inventory continues to fall short and is down 26 percent from a year ago. Rising sales for both new homes and existing homes reflect the strong demand for housing in the market. With fewer new listings added this week, buyer interest outpaced new selling, and the gap in inventory continued to increase slightly. On the surface, this trend seems like it’s purely a buyer’s challenge, but notably, the majority of home sellers will also buy another home. Thus, buyer challenges can impact seller participation. In fact, more than 1 in 4 homeowners who are not planning to sell indicated that the reason holding them back is that they can’t find a new home in their price range.
- Time on the market was down 9 days from last year. With fewer homes for sale now than this time last year, a typical home spent 47 days on the market in November, continuing to move fast. And other research suggests that gaps are likely even larger in the competitive suburban housing markets that have remained popular this year. This means buyers in today’s housing market still need to be prepared to act quickly even as the fall gives buyers a few extra days to make decisions relative to what was common in spring and summer. Buyers can focus their home search using online tools to personalize their results so they can act quickly on listings that are the best fit.