Home listings are increasing, which is ultimately good news for affordability – though it’s not quite that simple.
“For all the talk of America’s housing shortage, one would think that’s great news” that active listings are up, a release from real estate brokerage Redfin reads. But, one of the key drivers of increasing supply is buyers' unwillingness to take the plunge on a “pile up” of homes that seem too expensive, causing those listings to stagnate, Redfin reported.
Active home listings were up 12% during the four weeks ending Dec. 22 compared with the year before, and also reached a four-year high in November.
On average nationally, more than half (54.5%) of home listings in November had sat on the market for at least 60 days, up from 49.9% in November 2023. Homes that went under contract in November did so in an average of 43 days, “the slowest November pace since 2019,” Redfin noted.
“A lot of listings on the market are either stale or uninhabitable. There's a lot of inventory, but it doesn’t feel like enough,” said Meme Loggins, a Redfin real estate agent in Portland, Ore., highlighting something of a paradox.
Still, active listings are at their highest level since November 2020. Homes “priced well” are selling quickly.
“I explain to sellers that their house will sit on the market if it’s not fairly priced,” Loggins said. “Homes that are priced well and in good condition are flying off the market in three to five days, but homes that are overpriced can sit for over three months.”
Among the top-50 metro areas Redfin analyzed, Miami had the highest number of listings in November on the market for 60 days or longer without a contract, at 63.8% of total listings. After Miami were Austin, Texas (62.4%), Fort Lauderdale, Fla. (62.3%), San Antonio, Texas (60.3%), and Orlando, Fla. (59.9%).
Though more inventory can be a boon for affordability, higher mortgage rates aren’t. Redfin reported the weekly average 30-year fixed mortgage rate for the week ending Dec. 26 was 6.85%, up from 6.72% the previous week.
The housing market’s situation is, ultimately, positive – but again, contains a mix of signals, according to Mark Fleming, chief economist at First American Data & Analytics, a division of First American Financial Corporation.
“While inventory nationally and in most markets is greater than one year ago, it remains low from a historical perspective,” he said. “Nationally, housing supply is nearly 26% lower compared with November 2019, the winter before the pandemic hit.”
Even so, “the faster housing supply increases, the more affordability improves and the strength of the seller’s market wanes,” Fleming added. “Where supply surges, improving affordability often follows, which may bring buyers off the sidelines, unlocking pent up demand and reinvigorating market activity in the new year."
