In signs that the housing stock is seeing a meaningful recovery, active listings in July rose at a record annual pace — up 30.7% — for the third month in a row, according to Realtor.com. Monthly Housing Trends Report Released on Tuesday.
Although buyers had more choices of homes for sale in July, the competition has remained largely in favor of sellers, with prices listed near all-time highs and homes selling more quickly than they did before the pandemic.
“The US housing market continues to move towards more balanced supply and demand compared to the madness of 2021,” said Danielle Hill, chief economist at Realtor.com. “July data shows higher mortgage rates have caused many buyers to tighten their budgets and sellers to respond with price cuts, while home shoppers who continue to search see more options available.”
Meanwhile, new listings fell in July, suggesting that some potential sellers are questioning what recent shifts in the market mean for their listing plans.
“The data shows that homeowners grappling with this decision remain well positioned in many markets, with buyers interested in keeping well-priced homes selling quickly,” Hill said. In addition, many sellers own big arrow pillow To take advantage, thanks to the past decade of high prices. Whether or not they take advantage of these opportunities will be key to stock trends moving forward.”
Stock recovery accelerates despite fresh setbacks for sellers
Between supply and demand trends, July data suggests that easing buyer interest is the biggest driver of accelerating inventory improvements. With typical monthly mortgage payments now 1.5 times higher than they were in July 2021, Recent home sales data It shows that many buyers are putting their plans on hold, allowing room for growth in active listings.
However, the shift in market conditions appears to have the opposite effect on seller activity, with new listings declining for First time since March. This indicates that some homeowners are reconsidering their plans for listing in light of trends such as declining number of homes under contract. Despite the new seller’s decline, active listings grew at a record pace for the third consecutive month in July, indicating a property update on the horizon for 2022 buyers.
- In July, active listings stock increased 30.7% year over year, faster than ever in Realtor.com’s data record, based on record-breaking pace in June (+18.7%) and in May (+8%). These continued improvements are partly due to the continued annual declines in pending listings, which were larger in July (-19.4%) than in June (-16.3%).
- Nationally, newly listed homes are down 2.8% compared to July 2021, with the largest declines recorded in the Northeast (-14.3%) and Midwest (-11.0%). With northern regions less prepared for scorching temperatures, these trends suggest that recent record-breaking heat waves may also have played a role in the new seller’s dip in July.
- Relative to the national average, active inventory grew at a faster annual pace (+41.0%) across the 50 largest metro areas in the US in July, on average. Forty-five markets reported active listing gains, led by Phoenix (+158.7%), Austin, Texas (+154.5%) and Raleigh, North Carolina. (+137.5%).
- More new sellers entered the market than a year ago in 13 of the largest metropolitan areas, with a big jump in new listings in Las Vegas (+37.6%), Nashville (+37.1%) and Oklahoma City (+28.6%).
Competition among buyers is still fierce, but it shows early signs of cooling off
The setback of new listings in July suggests that some sellers may feel they have missed out on their opportunity to take advantage of favorable market conditions. On the other hand, the rise in home options available for sale has led to a much more buyer-friendly market compared to last year. Demand and price growth overall and per square foot alike continued to moderate in July, while the share of sellers making price cuts increased. On the other hand, competitive conditions remained largely in favor of sellers in July, with house prices remaining near all-time highs and time in the market still well below pre-Covid levels.
- The median US listing price came in at just $1,000 shy of its June high ($449,000), an increase of 16.6% year over year. On a square-foot basis, year-over-year required price growth slowed slightly in July (+15.5%) from the June pace (+16.2%).
- In early signs of potential lower demand for high-priced homes, annual growth in pending listing prices was lower in July (+12.4%) than in June (+13.9%), the third consecutive month of slowdown. In addition, 19.1% of homes were slashed in July, up from 9.4% in 2021 and outpacing the model for 2019 (18.0%).
- Asked rates are up year on year at 47 of the 50 largest metro stations, led by Miami (+36.2%), Memphis (+32.7%), and Orlando, Florida. (+28.4%), and fell in only three markets: Rochester, New York (-3.1%), Pittsburgh (-3.1%) and Cincinnati (-2.9%).
- The typical home spent 35 days on the market in July, down 2 days year over year and 26 days below the 2017-2019 average. Time on the market was the fastest of the year in Miami (-16 days), Orlando (-6 days), and Tampa (-6 days).
- At 24 metro, time in the market has slowed from the July 2021 pace, most notably in Austin (+11 days), Denver (+8 days) and Riverside, California (+7 days).
The affordability crisis is driving out-of-state demand from buyers who are still eager
Between rising housing costs increasing demand for affordability and increased adoption of remote work policies that are enabling some Americans to relocate, multiple trends are motivating home shoppers to seek places further from where they live. New research shows how increased buyers’ interest in relocation may be a contributing factor to July’s heated competition for homes in many regions of the country, with key findings from Realtor.com’s Q2 Cross-Market Demand Report including:
- From April to June, 53% of listings views on Realtor.com came from users outside of List Metro, up from 48% in the first quarter and a new all-time high.
- Regionally, the Northeast recorded the largest annual increase in views from users outside the market, up 6.8 percentage points to 45.9%. This may be a potential contributor to July’s Northeast inventory trends, where the annual increase in homes for sale (+3.0%) was smaller than any other region (Midwest: +10.2%; South: +51.6%; West: +68.9% ).
- Of the top 10 metro stations attracting off-market perspectives, eight offered more affordable listing prices than the national average for the second quarter ($440,650), including El Paso, Texas ($281,642), where it was 62.1 % of viewers of the list received from different market.
- Statewide, 37% of home shopper views of listings came from out of the state in the second quarter, higher than in the first quarter (36%) and the typical share from 2018 to 2020 (29%). The fastest growing destinations for out-of-state buyers year on year, in percentage points, were New Jersey (+12.7), Nebraska (+11.5) and Maryland (+11.3).
“Our analysis highlights how home shoppers prioritize affordability in the face of financial challenges, but also a variety of reasons Americans are taking advantage of relocation opportunities,” said Joel Berner, senior economic research analyst at Realtor.com.
He said, “People are eager to move to new areas that offer relatively lower living expenses in the face of high inflation, more outdoor entertainment, jobs in different cities, work in their old offices from home in a new location and more. As a result, we saw Market demand An increase in every quarter since 2020 at the height of pandemic lockdowns, and it’s a notable shift and one to watch as Americans progress to the new normal.”