Realtor.com recently published its October Monthly Housing Trends Report, which revealed further effects of the Fed’s aggressive interest rate hikes on the housing market.
The data indicates an indisputable cooldown of the real estate market nationwide. However, we are still a long way away from pre-pandemic levels. “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. Home shoppers are looking at a monthly mortgage payment that is roughly $1,000 higher than last year, and incomes are rising but not by that much,” says Danielle Hale, chief economist for Realtor.com. “Combined with asking prices that are still climbing at a double-digit yearly pace, the average American has taken a huge hit to their home buying power.”
Growing Inventory
The median listing price, nationally, continues to drop from an all-time high of $449,000 in June to $425,000 in October. This represents an annual growth rate of 13.3% compared to 13.9% last month. Nevertheless, home sellers are feeling the headwinds; the share of homes having their price reduced grew from 10.6% in October 2021 to 20.9% just a year later.
One of the consequences of the housing market slowdown is that the inventory of homes actively for sale has increased, nationally, by 33.5% over the past year. In fact, the 50 largest U.S. metropolitan areas saw their housing inventories increase by 46.4% over last year.
Although this may seem like good news for house hunters, the growing number of active listings is not due to more homeowners putting their properties on the market. Newly listed homes declined by 15.9% compared to October 2021, as property owners hesitated to sell their homes and move up to a higher payment. Instead, the inventory increase is likely due to a slower turnover. Properties stayed on the market 51 days in October of this year compared to 45 last year.
We’ll keep an eye on these stats in the future to see if these trends continue. In the meantime, if you’d like assistance in buying/selling or refinancing in today’s market, contact us.
