Housing Inventory Shortage Eases, But Stagnant Market Remains
The housing inventory shortage that has been plaguing the US for years appears to finally be easing, but a significant factor behind what is driving up supply provides little encouragement that the stagnant market will get moving again anytime soon.
New Report Reveals Increase in Homes for Sale
A new report from Redfin says the number of homes for sale jumped to a four-year high in November, surging 12.1% year over year.
But Most Homes on the Market Aren’t Selling
However, the major reason for the increase is that most homes on the market just aren’t selling.
More than half (54.5%) of homes on the market last month had been listed for more than 60 days, with many deemed too expensive by would-be buyers.
Stale Inventory on the Rise
According to Redfin data, that is up 49.9% from a year ago, and is the highest share of stale inventory for a November since 2019.
Slowest November Pace Since 2019
The report said that the typical home that went under contract last month did so in 43 days, which is also the slowest November pace since 2019.
Real Estate Agents Weigh In
“A lot of listings on the market are either stale or uninhabitable. There’s a lot of inventory, but it doesn’t feel like enough,” said Meme Loggins, a Redfin Premier real estate agent in Portland, Oregon.
“I explain to sellers that their house will sit on the market if it’s not fairly priced,” Loggins said. “Homes that are priced well and in good condition are flying off the market in three to five days, but homes that are overpriced can sit for over three months.”
Regional Variations
The data shows Texas and Florida have the highest rates of old listings on the market.
Miami has the greatest share of homes on the market for longer than 60 days than any other major metro at 63.8%, followed by Austin, which has 62.4% of listings that have sat for more than two months without going under contract.
Why the Market Remains Stagnant
The housing market saw a flurry of activity driven by high demand during the pandemic, but has become stagnant as soaring home prices and mortgage rates have led to an ongoing affordability crisis that has pushed homeownership out of reach for many Americans.
Housing costs repeatedly broke records in 2024, and a report from the National Association of Realtors’ (NAR) annual survey of buyers and sellers found the share of first-time homebuyers dropped from 32% in 2023 to 24% in 2024, the lowest share since NAR began collecting data in 1981.
Conclusion
While the increase in homes for sale may provide some relief to the housing market, the fact that most homes on the market are not selling suggests that the market remains stagnant. The ongoing affordability crisis and high mortgage rates continue to make it difficult for many Americans to purchase a home, leading to a slow and sluggish market.
FAQs
Q: What is the current state of the housing market?
A: The housing inventory shortage appears to be easing, but the market remains stagnant due to high home prices and mortgage rates.
Q: Why are homes not selling?
A: Many homes on the market are deemed too expensive by would-be buyers, leading to a high rate of stale inventory.
Q: What is the impact of the affordability crisis on the housing market?
A: The affordability crisis has led to a decline in the share of first-time homebuyers and has pushed homeownership out of reach for many Americans.
Q: What is the outlook for the housing market?
A: The market is expected to remain slow and sluggish until home prices and mortgage rates become more affordable for many Americans.
