Limited new listings are making it feel like a seller’s market in some parts of the U.S. even though sales are down by double digits. But some markets still feel cool, with for-sale homes lingering on the market.
If it feels like there aren’t enough homes on the market for the people who want to buy one, it’s because there aren’t. Even though elevated mortgage rates continue to dampen homebuying demand, low inventory means the homes that are for sale are going fast in some parts of the country.
The pool of homes available to buyers is shrinking quickly mainly because new listings are scarce. New listings fell 21.8% from a year earlier nationwide during the four weeks ending April 2, one of the biggest drops since the start of the pandemic, contributing to an unseasonal early-spring decline in the total number of homes for sale. Many homeowners are staying put because they’re unwilling to give up their low mortgage rate. Although average 30-year mortgage rates posted their fourth-straight decline this week, dropping to 6.28%, that’s more than double the sub-3% rates common in 2021.
Buyers are snapping up the homes that do hit the market fast. Of the homes going under contract, nearly half are doing so within two weeks. That’s up from about one-quarter at the start of the year, an unusually quick winter increase. It would take 2.8 months for today’s supply of for-sale homes to sell at homebuyers’ current consumption rate, the shortest time since September. That’s a sharp drop from the three-year high of 4.5 months in late January and it marks the fastest winter decline in months of supply since at least 2015, in percentage terms. It’s up from a near-record-low of 1.9 months a year ago.
Still, pending home sales are down 19% year over year, nearly as much as new listings. That’s partly because homebuying demand is lower than it was last year and partly because so few homes are hitting the market.
“Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers. Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow,” said Redfin Deputy Chief Economist Taylor Marr. “Today’s serious homebuyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly. The lack of homes hitting the market explains why the market is moving fast even though sales are still down. The lack of new listings is also one reason why sales are down: Buyers can’t buy if sellers don’t want to sell.”
While new listings are down in every major U.S. metro, the trend is more drastic in some areas. In Denver, where new listings are declining at roughly the same pace as the national drop and there are just 1.6 months of supply, Redfin agent Stephanie Collins said sellers have the upper hand as long as their home isn’t overpriced.
“Shiny new listings are getting multiple offers and selling fast. The caveat is that they have to be priced correctly from the beginning,” Collins said. “One of my buyers recently made an offer on a move-in ready home in a popular area. The home was priced right in line with the market at $520,000; it received eight offers and went for $560,000 to a competing buyer. That same client just had an offer $35,000 over asking price accepted in the same neighborhood. Sellers are hesitant, partly because it’s not spring 2022 anymore. I’m reminding potential sellers that buyers are out there, and some homes have bidding wars–they just need to price a bit lower than they would have a year ago.”
In Austin, a pandemic homebuying hotspot, buyers can take their time and they have a better chance of getting a home under list price. Inventory is piling up–Austin has 4.4 months of supply, more than almost anywhere in the country–and prices are down nearly 15% year over year, more than any other metro.
“Buyers have more power right now. The silver lining of high rates and the slow market we’ve been experiencing here is that some locals are able to buy in neighborhoods they couldn’t have gotten into last year and get contingent offers with small down payments accepted,” said Austin Redfin agent Andrew Vallejo. “But attractive homes that are priced competitively are selling quickly. Sellers are starting to notice, and they’re prepping and pricing their homes accordingly. I think we’ll start to see more listings over the next several months.”
Home prices dropped in more than half (28) of the 50 most populous U.S. metros, with the biggest drop in Austin, TX (-14.7% YoY). Next come four West Coast metros: Sacramento (-11.7%), Oakland, CA (-10.4%), San Jose, CA (-10.2%) and Seattle (-9.6%). That’s the biggest annual decline since at least 2015 for Seattle.
On the other end of the spectrum, sale prices increased most in Milwaukee, where they rose 11.4% year over year. Next come Fort Lauderdale, FL (8.9%), West Palm Beach, FL (8.2%), Miami (7.9%) and Columbus, OH (6.3%).
On a national level, the median U.S. home-sale price fell 2.1% year over year to roughly $362,000, marking the seventh straight week of declines after more than a decade of increases.
Unless otherwise noted, the data in this report covers the four-week period ending April 2. Redfin’s weekly housing market data goes back through 2015.
Refer to our metrics definition page for explanations of all the metrics used in this report.
