Housing Supply Is Piling Up as Home Sellers Enter the Market…
…But Buyers Stay on Sidelines
by Dana Anderson, Redfin
There are five months of for-sale supply on the market nationwide, up from 4.4 months a year earlier and the most since early 2019. That’s according to a new report from Redfin, the technology-powered real estate brokerage. Inventory is piling up because more sellers are listing their homes while fewer buyers are wading into the market.
New listings rose 7.4% year over year during the four weeks ending February 9, hitting their highest level for any comparable time period since 2022. Just after this time in 2022, mortgage rates started rising quickly, encouraging many homeowners to stay put to hold onto low rates. Now, that lock-in effect is starting to ease.
Pending home sales, meanwhile, fell 6%, similar to the declines Redfin has seen since the start of the year. The typical home that sold in that period took 57 days to go under contract — the longest span since March 2020, when the onset of the pandemic nearly ground the housing market to a halt. Sales are slow mostly because housing costs are high, with the median monthly housing payment sitting just $46 below its all-time high. Home-sale prices are up 4.3% year over year, and the weekly average mortgage rate is 6.89%, down slightly from a week earlier but still more than double the average pre-pandemic and early pandemic rates.
But more homebuyers may come out of the woodwork soon. Redfin’s Homebuyer Demand Index is up slightly from the six-month low it dropped to in late January, and agents report they’re seeing more house hunters.
“I’ve met with a lot of potential sellers over the last few weeks. Listings typically pick up in March or April, but this year it’s happening earlier,” said Fernanda Kriese, a Redfin Premier agent in Las Vegas. “Some of the sellers are listing because they bought just a few years ago and their home value isn’t increasing as quickly as they’d like, so they’re cutting their losses and moving to a less expensive home. Some are retirees who are downsizing. Buyers have been sidelined this year because of high mortgage rates and uncertainty surrounding politics and the economy, but some are starting to come off the fence.”
Pending Sales Ticking up in Los Angeles After Wildfires
Pending home sales in the Los Angeles metro rose 3.4% year over year during the four weeks ending February 9, the first increase after five weeks of declines.
It’s possible the uptick stems from the Palisades and Eaton fires, which destroyed thousands of homes in the Los Angeles area in early January. Some affluent people who were displaced by the fires may be buying new homes.
