As summer vacations wind down and backpacks and football reappear, the housing market sometimes gets a second wind. In a sign this may be the case, the median asking price bounced back this week as new listings–homeowners putting their home up for sale–also picked up. This could mean more buyers are taking advantage of what’s typically a slower season in the housing market to turn their dreams into reality.
For buyers, new listings growth means more options to choose from, and that’s helping to drive renewed improvement in overall active inventory levels, a trend toward a more normal housing market. Even as we celebrate this small step in the right direction, there’s still a big construction deficit to work through–more than 5.2 million over the last decade, in fact.
- The median listing price grew at 9.7 percent over last year. A jump back toward double digits after six weeks of single-digit price growth is uncharacteristic for this time of year. It is also a deviation from the recent trend toward a slower rate of home price growth driven in part by more smaller and affordable homes on the market in August. While we expect price growth to ease back into single-digits in the weeks ahead, upward home price pressure is likely to remain the norm as buyers and home sellers navigate a housing market that is short more than 5 million new single-family homes compared to household formation over the last decade.
- New listings–a measure of sellers putting homes up for sale–were up 2 percent. Last week, we noted the dip in new listings relative to one year ago and called it out as a metric to watch. We’re happy to see the bounce back in new listings which have now grown in 21 of the last 25 weeks. The increase in new listings is providing more options for home shoppers and even giving them some pricing power in some markets, despite the fact that most housing markets remain tipped in favor of sellers.
- Active inventory continues to fall short and is down 22 percent from a year ago. With new listings back on track, the inventory shortfall continues to be whittled away. It’s still a possibility that inventory will catch up to last year’s levels by the end of the year, but by no means guaranteed.
- Time on market was down 12 days from last year. With fewer homes for sale now than this time last year, the homes that are on the market continue to move fast. Despite the continued competitiveness, the housing market’s pace generally slows as we move into fall and this is one of several factors making it the best time of year to buy a home.