Some good news for homebuyers: The number of for-sale listings available for homebuyers increased at a record pace in October, according to a new report.
According to the report from Realtor.com, the inventory of active listings in the U.S. grew 33.5% year-over-year in October, and surpassed 2022 levels. Active inventory refers to a count of all homes listed as for-sale on the market.
Realtor.com called it a “milestone on the road to recovery” as the nation grappled with a shortage of homes over the last two years.
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Home prices are falling, with the median listing price dropping by $2,000 to $425,000, but affordability is still a challenge for buyers, given that mortgage rates are still high, at 7%.
Around 21% of active listings on Realtor.com have price cuts, their data showed.
“Although the number of active inventory is rising, newly-listed homes and pending listings dropped year-over-year.”
Although the number of active inventory is rising, newly-listed homes and pending listings dropped year-over-year, the company said, by 15.9% and 30% respectively.
So why the discrepancy between active listings, and pending/new listings?
Not a lot of new homes are hitting the market, and contracts with buyers are falling apart. Meanwhile, houses that have already been listed are languishing on the market for longer.
The number of unsold homes — that is, both active listings and listings in various stages of the selling process — increased by just 0.5% in October. Homes for sale stayed on the market for an average of 51 days in October, up 6 days on the same period last year.
New listings re falling, perhaps as some sellers blanch at the tough market and opt to wait instead of selling their home at a lower price than they would like. What’s more, they may also be reluctant to give up their ultra-low mortgage rate they nabbed during the pandemic.
Where’s active inventory rising the most?
“As the rapid run-up in rates reshapes housing-market dynamics this fall, both buyers and sellers are taking a step back to recalibrate their plans,” Danielle Hale, chief economist for Realtor.com, said in a statement.
“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,” Hale stated.
As mortgage rates have doubled over the last 12 months, the average home shopper in the U.S. is looking at a monthly mortgage payment that’s around $1,000 higher than what it was last year, Hale added.
“Inventory of newly-listed homes only rose in four markets, including Nashville, New Orleans, Dallas, and San Antonio.”
Among the largest 50 cities, 42 saw their active inventory jump in October, Realtor.com said.
Top gainers were Phoenix, which saw the total number of for-sale listings rise by around 174%. Raleigh followed with a similar jump in listings of around 167%, and Nashville, with a 145% increase.
Inventory of newly-listed homes only rose in four markets, however, including Nashville, New Orleans, Dallas, and San Antonio.
Cities in the West and the South saw the biggest increases in the share of price cuts, Realtor.com said. Nearly 36% of listed homes in Phoenix had price reductions, followed by 31% in Austin, and 24% in Las Vegas.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com