- The median listing price grew by 6.3% over last year. Growth in the typical asking price of for-sale homes moved lower after a slight uptick last week’s pace, once again hitting a new low since June 2020, when the housing market was beginning to bounce back from the initial pandemic shock. While the housing market had shown some signs of stabilizing, a renewed climb in mortgage rates could undermine the recovery. With the Fed signaling that higher rates for longer may be necessary to tame inflation, all eyes are focused on their March statement and clues on how their view of the future has evolved.
- New listings–a measure of sellers putting homes up for sale–were again down, this week by 26% from one year ago. For 35 weeks now, fewer homeowners put their homes on the market for sale than at this time one year ago. Until this week, the gap was slightly smaller than we saw in the last quarter of 2022. In February, attitudes toward housing worsened among both potential buyers and potential sellers as mortgage rates began to climb again and respondents reported lower job security. These attitudes could mean ongoing weakness in the number of homeowners deciding to sell.
- Active inventory growth continued to climb with for-sale homes up 61% above one year ago. Inventories of for-sale homes rose again, but the gain was the lowest we’ve seen since December. With new listings lagging behind year-ago pace, the growing number of homes for sale reflects longer time on market rather than an influx of sellers. It’s also important to remember that this year over year comparison is relative to early 2022, when active listings were at or near long-term lows. Even after these huge year over year gains, February data show that nationwide there are only just more than half as many homes for sale as were available pre-pandemic (-47%).
- Homes spent 18 extra days on the market compared to this time last year. For 31 weeks, homes on the market have been for-sale longer than was typical one year ago. After rising steadily from summer 2022, the gap surged early in 2023, surpassing the 3 week mark in mid-February. This week, however, marks the third week that the gap has shrunk even as new listings remain scarce, suggesting that buyers are active in the market, even if they are not as numerous as this time last year. Our February Housing Trends Report helps put these changes into context. Even though the median home listing was on the market for 67 days, 23 days longer than this time last year, this still trailed the pre-pandemic average for February by a nearly equal amount (20 days). In other words, using time on market as a guide, today’s housing market is halfway between its most frenetic period one year ago and what was typical before the pandemic-era frenzy. This means that the market has room to adjust in either direction, and mortgage rates will likely play a strong role in determining whether the market slows further or picks up speed.