Weekly Housing Trends Key Findings
As we move closer to the heart of home buying season, we’re starting to see some relatively promising signs in trends among sellers. While there are still fewer newly listed homes compared to a year ago, the share of newly listed homes is rising meaning that buyers are seeing more fresh listings relative to longer-for-sale homes. Unfortunately, the total number of homes for sale continues to decline meaning fewer overall options for buyers, causing prices to rise, homes to sell quickly, and buyers to show some signs of frustration. While buyer demand growth remains high, it slowed in the last week as some buyers are likely re-evaluating their options in light of these tough housing market conditions.
Median listing prices grew at 12.9 percent over last year, notching the 27th consecutive week of double-digit price growth, easily double the rate we would see in a more normal housing environment. With home shoppers active and sellers still lacking, this upward pressure on prices is likely to remain. Still, low mortgage rates in 2021 have helped offset the pain of higher prices, but mortgage rates are expected to rise later in the year, thus affordability is likely to become a top-of-mind consideration for buyers. Tools like the mortgage calculator can help buyers understand what price and mortgage rate changes mean for their monthly payments.
New listings–a measure of sellers putting homes up for sale–continue to fall behind the year-ago pace, registering 23 percent lower this week. After the upswing in newly listed homes at the end of 2020, new listings have to tread a different path in 2021, with large and consistent declines. Despite the early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, and last year’s extraordinarily low new listings comparison point will mean a year over year gains. One other potential bright spot for would-be homebuyers, new construction, which has risen at a year over year pace of 20% or more for the last few months, will provide additional for-sale inventory relief.
Total active inventory continues to decline, dropping 48 percent. With buyers active in the market and seller participation lagging, homes are selling quickly and the total number actively available for sale at any point in time continues to drop lower. In January as a whole, the number of for-sale homes dropped below 600,000.
Time on market was 11 days faster than last year meaning that quick decisions are still the norm. On the plus side for today’s buyers, this means that the share of fresh listings on the market is slightly greater than it was at this time last year. On the downside, today’s for-sale homes won’t be for sale long, so buyers will need to act fast when they find a home that fits.