A HouseCanary report found that despite closed prices achieving year-over-year growth, the housing market is experiencing historically low activity. This downturn comes as the Federal Reserve has raised interest rates to the highest levels in 22 years, aiming to combat a 3.2% year-over-year inflation growth observed in July.
"In August, the housing market continued to show low net new listings and slow price increases, and with the latest round of rate hikes, these market conditions are only expected to linger," said Jeremy Sicklick, co-founder and CEO of HouseCanary. "Single-family rentals remain the most desired choice for potential homebuyers in the current uncertain market environment, as price and inventory increase on a year-over-year basis persist."
HouseCanary's report also noted a shift of interest from purchasing to renting, reflected by the continuous year-over-year declines in purchasing market activity. This change is confirmed by the rapid increase in inventory for single-family rentals, which stands at a year-over-year growth rate of 41.4% as of August 2023, while inventory in the purchasing market is down 12.5%.
"As we move into September, we can expect an additional rate hike to be set in the upcoming meeting, continuing the trend of low market activity we have been experiencing over the past year," Sicklick said.
For August 2023, 216,619 net new listings and 256,777 properties went under contract. These figures represent a decrease of 29.5% and 17.1%, respectively, compared to August 2022. Furthermore, the median number of days on the market remained stable at 37, matching the figure from last August. The sale-to-list price ratio stood at a robust 99.3%, well above the lowest value observed in January 2023.
The report also highlighted that total inventory is down 12.5% from August 2022 and has declined by 10.7% since 2021. Conversely, the total single-family rental inventory has increased significantly — 41.4% from last year and 161.1% from 2021.
HouseCanary's latest findings add another layer to the unfolding narrative of a housing market in flux, shaped by rising interest rates, inflation, and changing consumer preferences.
