Now that the holiday season is in full swing, the housing market typically slows down until the new year. This holiday housing market, however, might be a whole different world.
One reason for this is that mortgage rates have dropped again, averaging 7.29% for a 30-year fixed-rate home loan in the week ending Nov. 22. (The results include an adjustment for the observance of Thanksgiving.)
“In recent weeks, rates have dropped by half a percent,” said Sam Khater, Freddie Mac’s chief economist. However, “potential homebuyers continue to hold out for lower rates and more inventory. This dynamic is reflected in the latest data showing that existing-home sales have fallen to a 13-year low.”
Yet the latest housing statistics from Realtor.com® show a glimmer of hope coming down the pike: For the week ending Nov. 18, new listings shot up a whopping 5% compared with last year.
We’ll break down what this and other just-released real estate statistics mean for buyers and sellers in this latest installment of “How’s the Housing Market This Week?”
Why more homes are hitting the market
Housing inventory has been famously scarce in recent months, but in the past three weeks, there’s been an upward trend of new listings coming to market.
“With the number of homes for sale already limited, a pickup in new listings is a welcomed change to recent inventory woes,” notes Realtor.com economic research analyst Hannah Jones in her analysis.
In addition to this gush of fresh listings, the total number of active listings (both new and old) increased by 1.5% for the week ending Nov. 18 compared with a year earlier. This is the second week in a row that these numbers exceed last year’s levels.
Granted, Jones points out that, “from a longer-term macroeconomic perspective, housing remains undersupplied.”
Pull back to the big picture, and you might be shocked to know that the number of for-sale homes is currently 41.8% below pre-pandemic levels.
Still, more homes are slowly but surely coming—particularly since both housing starts and housing permits have been climbing month over month.
The latest trend in home prices
On the not-so-good news front? So far at least, home prices are still rising.
The nation’s median list price ticked up by 1.2% over last year’s levels for the week ending Nov. 18.
“Though prices have continued to climb over last year’s level, mortgage rates have fallen for the last three weeks, promising relief for buyers,” Jones points out.
As more homes come to market and ease supply issues, prices might soon settle down, too.
“More active inventory will take some pressure off of home prices,” Jones explains. “And falling home prices, coupled with falling mortgage rates, will help buyers trickle back into the housing market.”
Still, this “gift” is more of a consolation prize, at least at this point.
“Prices remain higher than a year ago, and rates remain in the mid-7% range,” Jones concludes. “Meaning that unaffordability is likely to persist for the time being.”
Why the pace of home sales is picking up
While the pace of home sales tends to slow to a crawl in the fall, this season has been different on this front, too.
“This fall, the time a typical home spends on the market is growing much more slowly than is typical for this season,” says Jones.
In fact, the pace of sales has recently been speeding up. For the week ending Nov. 18, homes spent four fewer days on the market compared with this same time last year.
The take-home lesson for buyers is that if they see a home they like, they should not wait to close the deal—and that this holiday housing market is shaping up to be a highly unusual one.
Read more at Realtor.com
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