Written by Breck Hapner
According to the August 3rd realtor.com Weekly Housing Trends report, the U.S. housing market is currently experiencing some very interesting trends, such as substantial changes in home prices, housing inventory, new listings, days on the market (DOM), and the number of reduced-price listings.
The U.S. housing market was definitely experiencing the pains brought on by tight inventory and limited affordability during the month of July. Compared to a year ago, there have been fewer homes for sale nationwide for the past six weeks, which is considerably different from the 50 to 60 percent year-over-year (YOY) gains from December 2022 through March 2023.
This decrease in housing inventory is mainly due to new listings falling YOY for 56 consecutive weeks (i.e., more than a year of declines) and the fact that inventory was skyrocketing at this time last year. For example, based on data from Mike Simonsen at Altos Research (see the embedded video in the article), there are only 14,000 more homes for sale nationwide compared to the start of 2023 (i.e., three-percent growth YTD) versus this time in 2022, when 247,000 homes were on the market across the U.S.
Also, according to a Redfin report published this month, despite average 30-year fixed mortgage rates having hovered around seven percent, up from a three percent average in 2021 and a 5.3 percent average in 2022, the U.S. median sold price is up by three percent YOY during the four weeks ending August 6th, the biggest increase since November.
So, what is going on? Let’s take a look at realtor.com’s latest analysis for more insight. To access the spreadsheet statistics referenced in this article, head to the realtor.com data library and click on the “View US Data” link.
The realtor.com data presents some significant changes. For the week ending July 23rd, the median asking price on a national level actually increased by 0.2 percent. Last week it was flat, and before that were six consecutive decreases on a YOY basis. The weekend of June 10th posted a YOY drop of 0.9 percent in asking prices, the biggest decrease going back to July 2017 (as far back as realtor.com’s data goes).
Experts forecast positive gains in home prices YOY in the coming months, unless something drastic happens such as a sudden surge in mortgage rates or a spike in unemployment. However, please keep in mind that YOY and monthly changes should not be mistaken for one another, as home prices should decrease on a monthly basis for the remainder of this year due to seasonality and low affordability.