What this Week’s Data Means:
After two weeks of gains, new listings dipped 2% below year-ago levels in the last full week before Thanksgiving. This shift has intensified some hallmarks of competition relative to last year: homes sold 11 days faster and there were 27% fewer listings available for sale. One indicator that didn’t shift, however, is price growth. It remains in the relatively narrow range we’ve seen over the last few months, one small bit of relief for buyers.
With homes continuing to sell rapidly and at a high level, the number of homes available for sale is a limiting factor for many buyers, and seemingly paradoxically may also be a limiting factor for sellers. With as many as 1 in 4 homeowners choosing not to sell saying it’s because they can’t find a home in their price range, the housing market’s inventory woes trouble buyers and potential sellers. However, an improvement could be on the horizon, with more homeowners planning to sell their homes in the next 6 months and single-family home construction continuing at 1 million+ pace.
- The median listing price grew by 8.6 percent over last year. After an early-September uptick, home price growth has shifted back into the high single-digit territory and displayed consistency. Home prices have risen by 8.5% to 8.9% relative to one year ago in 14 of the last 16 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 down 2 percent from last year. After 2 weeks of increases, new listings slipped in the week before the Thanksgiving holiday. 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. With buyer demand high, existing-home sales rose in October. More new listings are needed to keep that momentum. Fortunately, our recent survey data suggests that a growing share of homeowners are potential sellers, eager to find new homes.
- Active inventory continues to fall short and is down 27 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 11 days from last year. Homes continue to move faster than in previous years. In fact, the speed has improved 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 time on market difference compared to last year grew again, as homes sold even more quickly compared to last year. 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.