The country’s supply of homes for sale hit its highest mark since 2020, as active listings increased by more than 33% year-over-year, according to the Realtor.com Monthly Housing Trends Report released Wednesday. However, October data suggests that fewer home shoppers could afford to take advantage of the rise in available inventory, with time on market continuing to climb amid still-high listing prices.
“As the rapid runup in rates reshapes housing market dynamics this fall, both buyers and sellers are taking a step back to recalibrate their plans. Home shoppers are looking at a monthly mortgage payment that is roughly $1,000 higher than at this time last year, and incomes are rising but not by that much. 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,” said Danielle Hale, chief economist for Realtor.com. “Still, our data indicates that some aspiring homeowners are finding ways to make the most of inventory conditions, such as by exploring relatively affordable metros. For buyers with the flexibility, relocating to a lower-priced market could help offset higher mortgage costs. There’s also a takeaway for sellers in these areas – on a well-priced home, you could still see strong interest from these out-of-towners.”
According to the report: Inventory recovery is accelerating amid higher rates and moderating demand:
- Nationally, active inventory grew 33.5% year-over-year in October, reaching the highest level in 24 months. Meanwhile, both newly-listed homes (-15.9%) and pending listings (-30.0%) declined year-over-year.
- Among the 50 largest U.S. metros, 42 markets posted yearly active inventory gains in October, led by Phoenix (+173.9%), Raleigh, N.C. (+167.4%) and Nashville, Tenn. (+145.0%). The number of for-sale homes was still down year-over-year in the remaining eight markets, by the largest amounts in Hartford, Conn. (-25.7%), Virginia Beach, Va. (-11.0%) Milwaukee (-9.6%) and Chicago (-9.6%).
- On average across the 50 largest metros, no regions saw year-over-year new listing increases in October, with the greatest declines registered in the West (-20.6%), followed by the Northeast (-17.4%), Midwest (-15.0%) and South (-9.8%). Furthermore, newly-listed homes increased in just four markets: Nashville, Tenn. (+10.5%), New Orleans (+6.2%), Dallas (+5.6%) and San Antonio (+1.4%).
- Compared to October 2020, active inventory was higher in 32 of the 50 biggest markets, led by western (+33.9%) and southern metros (+7.2%): Phoenix (+132.0%), Austin, Texas (+120.8%), Riverside, Calif. (+67.2%), Memphis, Tenn. (+59.7%) and Nashville (+55.7%). Inventory remained lower than two years ago in the Northeast (-21.1%) and Midwest (-7.9%).
According to the report, with home sales activity declining along with affordability in October, national trends reflected a market in which competition continued at a cooler pace than during this year’s summer peak. However, compared to last month, there was little change in both listing prices and time on market. This may be partly attributed to regional variations in supply and demand dynamics, with still-strong home shopper interest in relatively affordable markets balancing out the slowdown in other areas. In the Midwest and Northeast, where buyers saw relatively smaller inventory improvements in October, time on market and the share of homes with price reductions posted smaller year-over-year increases than in other regions.
- In October, national listing price trends were relatively unchanged from the prior month, with the median listing price dipping just $2,000 to $425,000. Additionally, annual home listing price growth decelerated just slightly, to 13.3% from 13.9% in September.
- On average across the 50 largest U.S. metros, yearly listing price growth entered single-digit territory in October (+9.2%). However, for-sale home prices continued to rise by double-digits year-over-year in 20 markets, led by Milwaukee (+34.5%), Miami (+25.1%) and Kansas City (+21.4%).
- The share of homes with price reductions was up 10.3 percentage points to 20.9% in October, well above 2017 (18.1%) and 2019 (17.0%) levels, but just under the 2018 share (21.2%). Western (+18.9 percentage points) and southern metros (+13.6 percentage points) posted the greatest increases in the share of price reductions: Phoenix (+35.9 percentage points), Austin (+31.2 percentage points) and Las Vegas (+24.4 percentage points).
- The typical home spent 51 days on the market in October, six days more than last year, but still 20 days faster than the typical 2017-2019 pace. The metros where homes spent longest on the market compared to October 2021 were Raleigh (+27 days), Austin (+26 days), Phoenix (+21 days) and Las Vegas (+21 days).
- Time on market declined year-over-year in October in 10 of the 50 largest metros, led by New Orleans (-21 days), where last year’s pace was impacted by Hurricane Ida, followed by Richmond, Va. (-15 days) and Birmingham, Ala. (-6 days)
