Luxe Austin Homes

Home prices won’t budge

While high mortgage rates have been tempered by falling home prices, that glimmer of good news has evaporated.

After six consecutive weeks of declining prices, the gap between year-over-year median home listing prices shrank to 0% for the week ending July 22. The median asking price for an average home was stuck at $445,000 in June.

The likely culprit for stubbornly high prices? Sellers with “pricing power,” as Hale puts it, who are sitting in the proverbial catbird seat.

“With mortgage rates still high and buyers cost-sensitive, the limited number of sellers on the market may be sensing their advantage, and pricing accordingly,” adds Hale. “The long-hoped-for price relief has not materialized as demand continues to outmatch limited supply, frustrating would-be homebuyers.”

However, some parts of the country do offer some relief for buyers in terms of affordability, notably the Northeast and Midwest.

Where are all the homes?

New listings entering the market were down for the week ending July 27 by 18% compared with a year ago, marking a 55-week streak. And active inventory (a combination of new and old listings) slumped 8% compared with the same time last year.

“The size of the gap has been large and fairly consistent over the past year,” notes Hale. “But as we pass the period in 2022 when new listings slowed sharply, we may see declines wane.”

Not that buyers should get their hopes up too high and expect a slew of new homes to choose from. But the consistent decline in new listings might finally slow and ultimately stabilize, giving buyers some predictable ground to stand on.

“With existing homeowners, choosing to sell in lower numbers than has been typical in recent years, inventory is expected to remain low, dipping by 5% overall compared to 2022,” says Hale.

But Hale also notes that “new construction offers buyers a lifeline in the form of options.”

The market’s marching to an ‘in-between state’

Fewer homes at high prices with a side of high mortgage rates means homes continue to grow stale.

For the week ending July 22, homes spent nine more days on the market, marking a 53-week streak of homes taking longer to sell compared with a year ago.

“High costs continue to be a stumbling block for some buyers, weighing overall demand,” says Hale.

Still, the pace of home sales is ticking up. Just two weeks ago, homes spent an average of 13 extra days on the market year over year. And last week, that shrank to 10 days.

“As we lap the 2022 housing slowdown period, this gap is likely to continue to shrink, and by fall we could even see homes selling faster than one year ago,” says Hale. “If so, that would mean that the market is settling into an in-between state, where homes sit on the market for fewer days than pre-pandemic, but somewhat longer than was common during the height of the real estate frenzy.”"

Source: Realtor.com

Written by: Margaret Heidenry 

Published: July 28, 2023