Fewer homes than ever were for sale in January, but homebuyers snapped up what they could before mortgage rates rose further, according to a Redfin report. Seasonally adjusted new listings fell 12.4 percent month over month, bringing the number of homes for sale down 2.6 percent to a record low. But demand persisted, and sales rose 7.5 percent.
“We believe that the inventory crunch will ease in the summer as rates rise but may not go away in 2022,” Redfin CEO Glenn Kelman said on Redfin’s fourth quarter earnings call. “We’re well aware of the economic pressures on homebuyers, but so many people are still so desperate to move that sales for now are still mostly constrained by inventory, not prices or even mortgage rates.”
Mortgage rates rose 0.81 points between Dec. 30 and Feb. 17, according to Redfin, which expects them to slow competition somewhat by summer.
“Homebuyers have zero leverage to negotiate right now,” Dallas Redfin real estate agent Barbara Tidwell-Vincent said in a release. “Even the homes that need work are hyper competitive thanks to all the investors in the market. Most of the homes hitting the market are listed by people who need to sell — estate sales, major life changes, that sort of thing. With so few homes for sale, everything is getting multiple offers.”
The national median home sale price in January was up 14 percent year-over-year to $376,200. Median sale prices increased from a year earlier in all but one of the 88 metro areas Redfin tracks: Bridgeport, Conn., where home prices fell 2 percent. The largest price increases were in North Port, Fla. (up 32 percent), Austin, Texas (up 32 percent) and Phoenix (up 29 percent).
Seasonally-adjusted home sales in January were up 7.5 percent month-over-month and down 4 percent year-over-year. Home sales fell from the prior year in 66 of the 88 metro areas Redfin tracks. The biggest sales declines were in Fresno, Calif. (-29 percent), Seattle (-22 percent) and San Francisco (-20 percent). The largest gains were in Honolulu (up 26 percent), Miami (up 10 percent) and Tulsa, Okla. (up 10 percent).
Seasonally adjusted active listings, or the count of all homes that were for sale at any time during the month, fell 18 percent year-over-year to an all-time low in January. The biggest year-over-year declines in active housing supply in January were in Allentown, Penn. (-46 percent), Anaheim, Calif. (-42 percent) and San Jose, Calif. (-41 percent).
The 12 percent year-over-year drop in seasonally adjusted new listings is the largest decline since May 2020. The only metro areas that saw more listings than a year earlier were Tulsa, Okla. (up 2 percent), Las Vegas (up 2 percent), Indianapolis (up 1 percent) and Detroit (up 1 percent).
Despite rising prices, home sales that closed in January spent longer on the market and were less likely to sell above list price compared with mid-2021. The typical home that sold in January went under contract in 27 days, a week faster than a year earlier and up 12 days from the record low in June.
In January, 42 percent of homes sold above list price, down 14 percentage points from the record high in June, but up 9 percentage points from a year earlier.