What this Week’s Data Means:
Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In addition, we continue to give readers more timely weekly updates, an effort that began in response to the rapid changes in the economy and housing as a result of the COVID-19 pandemic. Generally, you can look forward to a Weekly Housing Trends View on Thursdays with a weekly video update from our economists on Fridays. Here’s what the housing market looked like over the last week.
The housing market remains active as we progress through the fall, and more homeowners are choosing to list their homes for sale. The market data seem to highlight the results of our recently-published survey of home sellers, which indicates that many are ready to move forward with pandemic-delayed plans. The bump in new listings is a welcome development in a market still searching for more balance, and it helps keep price growth in check. However, demand from buyers keeps the inventory turnover swift, as well-priced homes do not linger on the market. The brisk pace of activity in an otherwise slower season is also bolstered by favorable mortgage rates, which dropped again this past week below 3.0%. With consumer confidence on the rebound, the tail end of 2021 is expected to see healthy activity in housing, alongside retail spending.
- The median listing price advanced 8.7% over last year. Prices have been rising in the high single-digits since the week of July 31, 2021, following almost a year of double-digit gains. Home prices have risen by 8.5% to 8.9% relative to one year ago in 13 of the last 15 weeks. 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 13.6%, buying may be the relatively more affordable housing option for some.
- New listings–a measure of sellers putting homes up for sale–were up 1% from last year. New listings rose for the second week in a row. The number of homes coming to market rose steadily during June through August and notched sporadic declines in September and October. An increase in supply is important to many buyers who are still looking for a home, especially considering that markets have fewer than half as many homes actively for sale now compared to 2 years ago. With our recent survey data suggesting that a growing share of homeowners are potential sellers, eager to find new homes there is reason to believe this may be the start of a welcome trend, especially as we move into the colder months.
- Active inventory continues to fall short and is down 25% from a year ago. Even with new listings gaining once again this week, the gap in inventory continued to increase slightly. Active inventory reflects the combination of seller participation and ongoing homebuyer interest. With home buyers still snapping up both new and existing homes, as they did in September, we have a ways to go before we can close the gap in active inventory.
- Time on the market was down 10 days from last year. Homes continue to move faster than in previous years. In fact, inventory turnover has sped up so much that every week since mid-March has had a lower time on the market than the fastest-selling week in any year before this one. This past week, the year-over-year time on market difference expanded, as homes sold even more quickly, further drawing down inventory despite more new sellers listing homes. While the overheated spring environment is behind us, it remains a seller’s market, and while buyers benefit from slightly more options and less competition, they still have to move briskly on well-priced homes. On the upside, buyers can leverage online tools to personalize their results and have timely information at the ready.