What this Week’s Data Means:
As we approach the end of October, the housing market is in a holding pattern at a relatively brisk level of activity. Indicators from home price growth to the change in active inventory and time on the market remain stuck in a narrow range relative to one year ago, neither heating up nor cooling down. Even the relatively variable new listings trend has been fairly steady in the last 6 weeks. The recent stability could indicate that the housing market is charting a relatively smooth transition from the unsustainably high level of activity to a more manageable long-run pace of growth.
- The median listing price grew by 8.5 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 12 of the last 13 weeks. Home prices continue to rise due to a mismatch between supply and demand, stemming from a decade-long shortage of homebuilding. While the rate of advance for the median home listing has slowed to half the pace we saw in spring, asking prices for typically sized single-family homes continue to increase at a double-digit pace. And home sales prices steadied or slowed in August data, but also remain near records. This means that housing affordability will be an increasingly important consideration for buyers.
- New listings–a measure of sellers putting homes up for sale–were down 4 percent from last year. New listings have declined in 7 of the last 8 weeks after gaining more often than not in the previous 5 months. With ‘finding the right home’ still a critical buyer pain point due to the limited availability of for-sale homes, this metric has an outsized impact on the future trajectory of home sales. As the number of homeowners putting homes up for sale has slowed relative to last year, so has the recovery in active inventory.
- Active inventory continues to fall short and is down 22 percent from a year ago for the seventh straight week. With new listings slipping again, the improvement in the inventory gap has stalled after improving fairly consistently since April. With home buyers still actively buying up what’s for sale, as they did in September for both new homes and existing homes, it’s harder for active inventory to grow.
- Time on the market was down 8 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 2020. 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. Before you start searching, use tools to know how much home you can afford and test out what rising mortgage rates could mean for your monthly payment with our mortgage calculator.