Buyers are flooding the housing market early in the year, as they have in the last few years, eager to find a home of their own. With plenty of buyers and not as many sellers, homes are selling fast at prices much higher than this time last year. Seller activity typically picks up as we approach May, and the data suggest this may be ahead, welcome news for homebuyers.
Weekly Housing Trends Key Findings
- Median listing prices grew at 14.2 percent over last year, notching 31 consecutive weeks of double-digit price growth. The market continues to see home prices soar for two reasons. First, because there are many buyers and few sellers. The way free markets balance scarce supply with high demand is with rising prices. Second, low mortgage rates meant that although the sticker price of homes is much higher, the monthly costs had not risen much, although that is changing as rates rise. The monthly principal and interest payment on the typical listing in January and February 2020 was $1,070 and $1,095, respectively. In 2021, monthly payments were $50 and $100 more, totaling $1,120 and $1,200, respectively. Additionally, although they remain low, mortgage rates have begun to increase and are expected to rise further later in the year, thus affordability will test buyer demand in the months ahead and likely help slow the pace of price growth.
- New listings–a measure of sellers putting homes up for sale–continue to fall behind the year ago pace, registering 24 percent lower this week. Although they remain below the year ago pace, we saw some week to week growth in the number of sellers that’s typical of this time of year, and we expect more ahead. While competitive conditions have drawn buyers out early in recent years, excepting 2020, the first weeks of May have historically been when we see the biggest numbers of sellers put their homes up for sale. Thanks to the post-holiday COVID surge and severe winter weather,we’re starting the year behind–missing more than 200,000 fresh listings that would typically have come to market in January or February. Put another way, the key weeks for selling activity are still ahead of us and we’ll need to see more new listings growth to see healthy sales activity this spring.
- Total active inventory continues to decline, dropping 51 percent. Because homes are selling quickly, the total number actively available for sale at any point in time continues to decline.
- Time on market was 7 days faster than last year. While COVID adjustments have increased the time it takes to do many things, putting an offer on a home is not one of them. Buyers in today’s market must be prepared to submit an offer fast in order for sellers to consider it.