If homes for sale inventory is so weak, why aren’t home prices falling faster? In 2018, the weekly available inventory was dipping seasonally, as it usually does, from the five year high
Homes for sale inventory 10-24-2023
Dated: October 24 2023
If homes for sale inventory is so weak, why aren’t home prices falling faster?
In 2018, the weekly available inventory was dipping seasonally, as it usually does, from the five year high of 1,000,000 single family homes for sale. In 2023, even with inventory up over the past week by 1.4%, there are currently 554,420 homes for sale in the United States. In other words, there are about half as many homes for sale in the same time period.
Home prices are high, affordability is low, and demand is low. You may think that these conditions would force home prices down. However, a market correction requires a falling demand and a rising supply. The supply side is keeping prices at near high levels.
Weekly New Listings
Inventory has been slowed by the lower number of sellers than in the previous years. Only 57,000 unsold new listings entered the market nationwide during the past week. Overall, 2023 has had fewer new sellers than almost any time over the past five years. The result is a balance between low demand and low supply. Only the area surrounding Austin, Texas has a growing supply of homes for sale approaching levels of years past. The Northeast and parts of the Midwest are still at or near inventory levels of the pandemic lows.
Weekly Total Home Sales Contracts Pending
As of 10-23-2023 there were 325,000 pending sales of single family homes nationwide with 55,000 new sales this week. Compared to last year, new sales were up by 1,000 but pending sales showed a decline o f 18,000. This shows that homebuyer demand is historically low compared to recent times.
Percent of Homes with Recent Price Reductions
With high mortgage rates there are fewer offers than what has happened over the past couple of years so sellers are beginning to cut their price.
Currently the number of properties getting a price reduction is at 38.5%, which is the same as January 1, 2023. It is approaching the number of price cuts experienced at the end of 2022 when rising mortgage rates were big news. The rising number of price cuts is still on the rise which is more than normal for this time of the year.
Median Home List Price
The Median Home List Price is just slightly higher than it was at this time in 2022. However, the Median Price of New Listings has dropped considerably. The price difference is almost 10% between $394,900 and $435,000.
Pending Home Sales Median Price
The Median Price of Total Pendings is hovering around $380,000 compared to the sinking price of $365,000 of the Median Price of Newly Pending.
The pace of inflation is still well above the Federal Reserve’s stated long-term target of 2%, supporting the central bank’s "higher for longer" stance on interest rates. Source: Yahoo Finance
As long as inflation remains high the federal government will continue to strive to lower housing costs by keeping interest rates high.
Stonington RealtorBridget Morrissey is a renowned real estate agent who focuses on areas in Stonington, Mystic, Pawcatuck, And Stonington Borough. Some of the areas covered are Lords Point, High Ridge....