For the first time since May 2023 home shoppers are seeing a larger number of unsold homes on the market, according to the Realtor.com® December Monthly Housing Trends Report.
Looking ahead, as mortgage rates have been on a downward trend since the beginning of November, Realtor anticipates a positive impact on home-selling sentiment and the possibility that more new listings will enter the market.
“Across the U.S. we’re seeing improvements in inventory levels, especially in the South, which experienced a 7.7% increase in active listings year-over-year,” said Danielle Hale, chief economist, Realtor.com®
“While the uptick in December inventory levels is encouraging, it is important to note that two-thirds of outstanding mortgages in the U.S. have a rate under 4% and more than 90% have a rate less than 6%. We are optimistic that inventory levels are moving in a positive direction, but the number of homes on the market is still low relative to pre-pandemic levels. Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes,” he added.
On the Up and Up
Homebuyers typically avoid big moves during the December holiday season unless they absolutely must sell or buy, leading to generally different real estate activity than what is experienced in the peak summer season. Though the market is still not where it was pre-pandemic as active inventory sits 34.3% below typical 2017 to 2019 levels, in December 2023 home sellers were active with 9.1% more newly listed homes compared to last year. When looking at the month-over-month change between November and December, a time when the decline in inventory has historically hovered between 6.8% and 13.2%, this year there was a more modest 5.5% decrease, indicating a much smaller than typical drop for this time of year.
Southern Belles
When examining the 50 largest metros, 23 experienced increased inventory levels year-over-year, with Memphis (+28.5%), New Orleans (25.5%) and San Antonio (20.9%) experiencing the most growth among them. Though this growth is promising, the country is still seeing lower inventory levels as a whole relative to pre-pandemic times with the exception of San Antonio (+12.8%), Austin (+11.7%) and New Orleans (+11.6%), which saw higher levels of inventory in December 2023 compared to typical 2017 to 2019 levels.
Prices Continue to Stabilize and Properties Move Faster
The median price of homes for sale in December remained relatively stable compared to the same time last year, growing by 1.2% with a few standout places experiencing a decrease including the surprising Nor Cal suburb of San Jose, which saw a decrease of 7.1% in median listing price year-over-year, as well as San Antonio (-3.9%) and Memphis (-2.5%).
When it comes to days on market, homes are moving quicker than before. Generally, homes spent 61 days on the market, which is four days shorter than December 2022 and about two weeks shorter than before the COVID-19 pandemic.
To read the full report click on the following link.
