More Home Sellers, Fewer Sales (1/13/25 Market Update)
Jan 14, 2025
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The podcast digs into the current U.S. housing market, highlighting a surge in single-family home listings. Rising mortgage rates are shaking up buyer activity, while recent disasters in California further complicate dynamics. Analysts predict interesting changes in supply and demand as the market evolves. The data-driven insights provide a clear picture of future trends, leaving listeners with a deeper understanding of what to expect.
An increase in new listings shows more sellers entering the market, potentially restoring inventory to historical norms quickly.
Despite increased listings, high mortgage rates are causing a decline in home sales, creating pressure on prices amidst changing demand.
Deep dives
Increasing Seller Activity
This week saw a significant increase in new listings for single-family homes, totaling 45,000, representing a 12% rise compared to the same time last year. This upward trend indicates that more sellers are entering the market, which could lead to an increase in overall inventory in the coming years. If this trend continues, it may return inventory levels to historical norms much quicker than anticipated. An increase in seller activity could lead to price pressure if demand does not keep pace with the influx of new listings.
Impact of Mortgage Rates on Market Dynamics
Mortgage rates are currently hovering around seven and a quarter percent, nearing the high end of forecasts for the year, driven by strong job data and inflation concerns. This rapid increase in rates is causing a notable decline in home sales, with under 41,000 pending contracts, which is a 3% decrease compared to the same week last year. As the economic landscape fluctuates, there is optimism that rates may drop closer to 6% later in the year, which could revitalize market activity. However, the current bearish sentiment in the bond market continues to challenge potential buyers and may influence overall sales negatively.
Market Trends and Predictions
Current trends show that inventory dipped to 624,000 homes for sale this week, despite a significant increase in new listings, indicating that withdrawals outpaced new sales. The overall home price trends are moderated, with homes in contract seeing a slight decrease in price appreciation, now hovering around a 2% yearly increase. As more properties flood the market and buyer interest wanes, there is little momentum for significant home price gains, leading analysts to closely monitor future developments. In light of these observations, it remains essential to track how supply and demand dynamics will evolve in early 2025, particularly as the housing market heads into the spring buying season.
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Current Trends in the U.S. Housing Market: Inventory and Price Forecasts
Welcome to How’s the Market, our weekly look at what’s happening in the US housing market, powered by data from Altos Research.
If you want to see all the inventory, pricing, and supply and demand charts we reference in the show, head on over to our YouTube channel at https://youtube.com/altosresearch.
Hosted by Mike Simonsen, President of Altos Research.A true data geek, Mike founded Altos Research in 2006 to bring data and insight on the U.S. housing market to those who need it most. Altos provides national and local real estate data to financial institutions, real estate professionals, and investors across the country, and the company is now part of HW Media, publisher of HousingWire and RealTrends. Mike uses Altos data to identify trends in the real estate market well before the headlines, and his work has been featured in the New York Times, The Atlantic, Fortune, Forbes and other publications.
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