Some good news for homebuyers: The number of homes for sale increased at a record pace in October, according to a new report.
The report from Realtor.com found that the inventory of active listings in the U.S. grew 33.5% year over year in October, surpassing 2022 levels. Active inventory refers to a count of all homes listed for sale on the market.
Realtor.com called it a “milestone on the road to recovery,” as buyers have grappled with a shortage of homes over the last two years.
(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp
Home prices are falling, with the median list price dropping by $2,000, to $425,000, but with mortgage rates around 7%, affordability remains a challenge for buyers.
About 21% of active listings on Realtor.com have had price cuts, the data showed.
“Although active inventory is rising, newly listed homes and pending listings both dropped year over year.”
Although active inventory is rising, newly listed homes and pending listings dropped year over year, the company said, by 15.9% and 30% respectively.
Why the discrepancy? Few new homes are hitting the market, and some contracts with buyers are falling apart. Meanwhile, homes that are listed are languishing on the market for longer.
The number of unsold homes — which includes active listings and listings in various stages of the selling process — increased by just 0.5% in October. Homes for sale stayed on the market for an average of 51 days in October, up 6 days over the same period last year.
The number of new listings is falling, with some sellers blanching at the tough market and opting to wait rather than sell their home for less than they would like. And sellers who will then need to buy a new home may also be reluctant to give up the ultra-low mortgage rates they nabbed during the pandemic.
Where’s active inventory rising the most?
“As the rapid run-up in rates reshapes housing-market dynamics this fall, both buyers and sellers are taking a step back to recalibrate their plans,” Danielle Hale, chief economist for Realtor.com, said in a statement.
“Combined with asking prices that are still climbing at a double-digit yearly pace, the average American has taken a huge hit to their homebuying power,” Hale said.
As mortgage rates have doubled over the last 12 months, the average home shopper in the U.S. is looking at a monthly mortgage payment that’s around $1,000 higher than what it was last year, Hale added.
“Inventory of newly listed homes rose in just four markets: Nashville, New Orleans, Dallas and San Antonio.”
Among the country’s largest 50 cities, 42 saw their active inventory jump in October, Realtor.com said.
The top gainers were Phoenix, Ariz., which saw the total number of for-sale listings rise by around 174%, followed by Raleigh, N.C., with a similar jump of around 167%, and Nashville, Tenn., with a 145% increase.
Inventory of newly listed homes, however, rose in just four markets: Nashville; New Orleans, La.; Dallas, Texas; and San Antonio, Texas.
Cities in the West and the South saw the biggest increases in the share of price cuts, Realtor.com said. Nearly 36% of listed homes in Phoenix had price reductions, followed by 31% in Austin, Texas, and 24% in Las Vegas, Nev.
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