Fewer new listings are hitting the market as sellers continue to hold back, slowing the pace of national inventory growth.
Despite mortgage interest rates decreasing over the past few months, listing and sales activity remains muted, according to the latest weekly housing market trends report from Realtor.com®.
“Buyers remain cautious, with homes lingering on the market longer and prices holding flat even as rates remain near 11-month lows,” says Realtor.com senior economist Jake Krimmel.
New listings—a measure of sellers putting homes on the market—fell 0.5% during the week ending on Sept. 27, marking the third weekly drop since April.
In September, newly listed homes fell 1.2% year over year—a worrying sign.
“The decline in new listings is in part behind the slowdown in national inventory gains over the past few months, as sellers retreat from the market,” explains Krimmel.
Active listing growth has slowed in each of the past four months, plunging from 31.5% in May to 17% in September, according to the latest monthly housing market trends report.
With the “Best Time To Buy” less than two weeks away, Krimmel says buyers will likely see more stale listings left over from the summer than an influx of fresh options.
Last week, the total number of for-sale homes in the U.S. increased 16.2% compared to a year ago, representing the 15th consecutive week of easing growth.
Still, it was the 99th week in a row of annual inventory gains, with 1.1 million listed homes now on the market.
“Active inventory is growing significantly faster than new listings, an indication that more homes are sitting on the market for longer,” reiterates Krimmel.
Homes wait for buyers longer, prices flatten
The glacial pace of sales continued last week, with the typical property sticking around on the market six days longer than a year ago.
Krimmel notes that with a median of 63 days on the market, homes are now taking as long to sell as they did before the COVID-19 pandemic six years ago.
However, it’s important to note that conditions differ significantly across regions.
“Though every region is seeing longer time on market than last year, homes continue to move more slowly in the softening West and South than the resilient Midwest and Northeast,” says Krimmel.
Meanwhile, the median list price was flat compared to the same period a year ago, marking eight weeks of steady or falling prices. The last time this metric saw an increase was two months ago, when the median price increased 0.8% year over year.
Adjusting for home size, the price per square foot fell 0.5% from a year ago for the fourth consecutive week.
“Price per square foot had been growing steadily for almost two years, but the weak sales activity has finally caught up and stalled out this metric, suggesting underlying home values are starting to soften— at least in national aggregates,” says Krimmel.