This week’s data point to an inflection in real estate activity, suggesting that we may have made it past the peak of this hot housing market. Last week marked the first time in almost four months that the decline in time-on-market has moderated, a sign that some properties are sitting slightly longer on listing portals. Additionally, newly-listed homes continued to grow compared with last year and the steep inventory declines of the past few months have been moderating. The net effect has been a slowdown in listing price growth. While home prices are still growing at a double-digit pace, their advance is past peak growth rates.
For buyers, the market metrics point to a welcome development as we enter the crucial summer months. Historically, families with school-age children are particularly active in-between the academic years, either looking for larger homes or for homes in other school districts. The increase in the number of homes for sale this summer would provide buyers seeking to capitalize on low mortgage rates more selection and boost sales activity. An improving inventory of existing homes would also complement new housing construction, which has been struggling with sharp increases in materials and labor costs.
Weekly Housing Trends Key Findings
- Median listing prices increased 12.2% over last year, marking 45 straight weeks of double-digit price growth. The median home listing price typically hits its seasonal peak in June. Last year, we saw the median listing price hit its peak later into the season in September, due to the pandemic lockdowns. While still rising at a double-digit pace, median price growth is visibly moderating, with the latest data marking the 10th week of a slowdown from a high of near 19% (year-over-year) in early April. If this trend of moderation continues, we will likely see a more typical seasonal price pattern into the second half of 2021 compared to last year.
- New listings—a measure of homeowners listing properties for sale—continue to improve, rising 4% over last year. We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.
- Total active inventory continues shrinking, but it slid just 42% from this time last year. This is an improvement from the 44% decline from the previous week, and the 54% drop registered in early April of this year. Home inventory remains tight, but there is a clear improvement.
- Time-on-market was 33 days faster than last year. The typical active listing hit a record fast pace of 39 days in May. However, this past week marked the first time that the year-over-year decline in time-on-market has moderated in 16 weeks. Buyers should still expect to act quickly on their desired homes, but we are seeing signs that the peak of the frenzy may soon be behind us.