Housing Market Sees Rise in Supply, But Prices Still High
Nationwide Inventory Sees 36% Annual Growth in August
Nationwide, active listings in August were up 36% compared with the same month last year, according to a new report from Realtor.com. This marks the 10th straight month of annual growth. Although supply is increasing, it is still 26% lower than in August 2019, pre-pandemic.
Fewer New Listings Contributing to Supply Growth
As inventory grows, sellers are pulling back. There were fewer new listings in August (-1%) than there were the year before. The growth in supply is due to the fact that homes are sitting on the market longer.
Mortgage Applications See Decline
The widely anticipated Fed rate cut has already ushered in lower mortgage rates, but it seems that some buyers and sellers are waiting for additional declines. This can be seen in weekly mortgage data. Applications for loans to buy a home are down about 4% compared with this time last year, according to the Mortgage Bankers Association. This, even though the average rate on the 30-year fixed mortgage is about 75 basis points lower now than it was then.
Regional Supply Variations
While supply is increasing in most cities, some are seeing huge gains. Tampa, Florida’s inventory is up more than 90% compared with a year ago. San Diego is up 80%, Miami is up 72%, Seattle is up 69%, and Denver is up 67%. Regionally, active listings rose 46% in the South, 35.7% in the West, 23.8% in the Midwest, and 15.1% in the Northeast.
Homes Sitting Longer on the Market
More supply is causing homes to sit for sale longer. The typical home spent 53 days on the market in August, an increase of seven days from a year ago and the slowest August pace in five years.
Conclusion
The housing market is seeing a rise in supply, which is leading to a decrease in prices. As more homes are listed and sit on the market longer, we can expect to see a more balanced market. While prices are still higher than in 2019, the current trend is towards moderation.
Frequently Asked Questions
Q: What is the current state of the housing market?
A: The housing market is seeing a rise in supply, which is leading to a decrease in prices.
Q: Why are fewer new listings being added to the market?
A: Sellers are pulling back as inventory grows, and homes are sitting on the market longer.
Q: What is the current state of mortgage applications?
A: Mortgage applications are down about 4% compared with this time last year, despite lower interest rates.
Q: How do regional areas vary in terms of supply?
A: Some areas, such as Tampa, Florida, and San Diego, are seeing huge gains in supply, while others, such as the Northeast, are seeing more modest increases.
Q: Why are homes sitting longer on the market?
A: More supply is causing homes to sit for sale longer, leading to a more balanced market.
