Peak Home Buying Season

As the U.S. enters peak home buying season, we should be ripping shirts off, showing off the hot summer bod, feeling confident, eating good old fashion hot dogs… but the housing market is looking more like May Grey and June Gloom. Some areas are heating up while others are cooling down, especially in the South where inventory is growing fast.

With mortgage rates around 7%, a ton of potential buyers are still waiting on the sidelines, keeping home sales only slightly ahead of last year’s pace, and leading indicators suggesting that home prices may not be rising as much as some reports suggest.

Housing Inventory:  Housing inventory has increased to 568,000 unsold single-family homes, up 1.5% from last week, with a 35% rise compared to last year, and is expected to reach 700,000 by the end of September. The growth in inventory is influenced by higher mortgage rates, which have kept many homes unsold and on the market.

New Listings:  This week saw 69,000 (nice) newly listed single-family homes and 20,000 already under contract, totaling 3% fewer new listings than last week and falling short of the ideal 100,000 weekly new listings. Despite this, there are 10% more sellers than last year, with more unsold new listings, immediate sales, and a 24% increase in “coming soon” listings, indicating that inventory and sales volume will likely continue to grow (good news, by the way).

Pending Sales:  Currently, 393,000 single-family homes are under contract, just 2% more than last year, with 72,000 new sales this week—7% fewer than last week but 6% more than the same week in 2023. You keep track of all those numbers? Home sales are closing faster this year, averaging 33 days under contract compared to nearly 40 days last year, contributing to the higher weekly sales despite a modest increase in overall homes in contract.

Home Prices:  The median price of a single-family home in the U.S. is $450,000, unchanged from last year, with new listings peaking around the same price. While pending home prices are slightly higher at $400,000, the overall market shows little price appreciation over the past year, with prices clustering around these key figures.

Price Reductions:  Currently, 33.7% of homes on the market have had price reductions, up from last week and significantly higher than last year. This trend of increasing price cuts, typical for this time of year, indicates that many sellers are adjusting their expectations to attract buyers as the market continues to evolve.

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