On August 16, 2022, a For Sale sign was posted in front of a property in Monterey Park, California.
Frederick J. Brown | AFP | Getty Images
After more than two years of a historically lean housing market, properties are starting to climb rapidly.
Active inventory in October increased 33.5% nationwide from the same period last year, according to Realtor.com. This brings the supply to his highest level in two years.
It’s not like sellers are flooding the market. Newly listed homes are down 16% year-over-year, while pending listings are down 30%. But homes on the market aren’t selling as fast as they did just six months ago, so supply is picking up.
The average number of days it takes to sell a home is now 51 days, an increase of 6 days from a year ago.
“As rapidly rising interest rates reshape the dynamics of the housing market this fall, both buyers and sellers are taking a step back to readjust their plans,” said Daniel Hale, chief economist at Realtor.com. .
Mortgage rates have been so high and rising so quickly that home shoppers are on the sidelines. Home prices have risen more than 40% since the start of the Covid-19 pandemic and affordability was already tight. But the current rate is just over 7%, more than double from January Potential buyers expect monthly payments to be nearly $1,000 higher than they were at the beginning of the year.
Housing availability varies from city to city, depending on demand and affordability.
In Phoenix, inventory surged 174% in October. The city has been inundated with buyers over the past two years as workers suddenly moved from anywhere to work from California’s expensive market. According to Redfin, sales in the city are now down more than 30% from a year ago.
Inventories are up 167% in Raleigh, North Carolina, and 145% in Nashville, Tennessee, markets that saw an influx of buyers during the pandemic. Inventories are still declining in Chicago, Milwaukee and Hartford, Connecticut, but those markets have not seen the same surge in demand in the past two years.
A slowdown in housing demand is driving sellers down prices. His 20% of listings on Realtor.com are now discounted, nearly doubling his share a year ago.
Still, house prices haven’t exactly come down yet. However, several studies show that the price gains from a year ago are shrinking at the fastest pace on record.
And with the price still high, more buyers seem to be broadening their search. In the third quarter of this year, just over 60% of his listings on Realtor.com came from shoppers outside the listing’s area. This is up from 57% in Q2 2021 and 52% in Q2 2021.
“For flexible buyers, relocating to lower-priced markets could help offset higher mortgage costs. Townspeople,” Hale added.