US New-Home Listings Jump Most In Three Years

US New-Home Listings Jump Most In Three Years

The 30-year fixed mortgage rate is edging closer to 7%, having stayed below 6.6% since May 2023. With mortgage rates remaining high, we ask this very simple question: Will the high rate environment deter homebuyers from listing their homes as the spring home-buying season fast approaches? 

Let’s take a look at the latest inventory data from residential real estate brokerage Redfin, which shows new home listings jumped 13% year-over-year for the four weeks ending Feb. 25, the most significant increase in three years. 

“Total inventory is also improving: Active listings are flat from a year ago, marking the first time in nine months the total number of homes for sale hasn’t declined,” the report said. 

The increase in new listings is a welcoming sign as 2023 headwinds in the housing market will persist this year. This includes elevated mortgage rates, an affordability crisis, and record-low housing stock – this makes for a perfect unaffordability recipe. 

The good news is buyers are getting more homes to choose from despite elevated housing costs. As of Feb., the average homebuyer’s mortgage payment was around $2,671, just $47 shy of last October’s record high. 

In a separate report, the real estate news website HousingWire noted:

“Inventory is very seasonal, and we are about to start our seasonal increase in inventory. But even before that seasonal boost, we are showing year-over-year growth in inventory despite higher rates. Most home sellers are buyers of homes, so the action we are seeing this year is a healthy step in the right direction to get more balance in the housing market.” 

Another report from Realtor.com also showed an increase in housing inventory for the week ending Feb. 24: 

“Active inventory increased, with for-sale homes 17.8% above year ago levels. For a 16th straight week, active listings registered above prior year level, which means that today’s home shoppers see more for-sale homes. In fact, the January Realtor.com Housing Trends Report showed that 2024 had the most abundant level of inventory in the most recent four years. Nevertheless, the number of homes on the market is still down nearly 40% compared to what was typical in 2017 to 2019.”

Meanwhile, new home sales in January disappointed as mortgage rates are back on the rise. We shared with readers last month that new home supply ticked higher. 

The increase in housing supply might indicate a slower rise in home prices this year compared to recent years. 

Chief economist at First American Financial Corporation Mark Fleming recently noted a “flat stretch” for home prices is ahead:

“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right.” 

The problem with the housing market is that if rates cool too quickly, it could ignite another buying wave. So if rates bounced between 6.5% – 7%, inventories could continue building, pressuring prices lower. 

Tyler Durden
Mon, 03/04/2024 – 18:00

via ZeroHedge News https://ift.tt/AJ21WOB Tyler Durden

Leave a Reply

Your email address will not be published.