There are five months of for-sale housing supply on the market nationwide, up from 4.4 months a year earlier and the most since early 2019, according to a new report from Redfin. Inventory is piling up because more sellers are listing their homes while fewer buyers are wading into the market, according to the report.
New listings rose 7.4 percent year-over-year during the four weeks ending Feb. 9, hitting their highest level for any comparable time period since 2022. Just after this time in 2022, mortgage rates started rising quickly, encouraging many homeowners to stay put to hold onto low rates. Now, that lock-in effect is starting to ease.
Pending home sales, meanwhile, fell 6 percent, similar to the declines Redfin has seen since the start of the year. The typical home that sold in that period took 57 days to go under contract—the longest span since March 2020, when the onset of the pandemic nearly ground the housing market to a halt.
According to Redfin, sales are slow mostly because housing costs are high, with the median monthly housing payment sitting $46 below its all-time high. Home-sale prices are up 4.3 percent year-over-year, and the weekly average mortgage rate is 6.89 percent, down slightly from a week earlier but still more than double the average pre-pandemic and early pandemic rates.
This may change because demand is slowly rising. Redfin’s Homebuyer Demand Index is up slightly from the six-month low it dropped to in late January, and agents report they’re seeing more house hunters.
“I’ve met with a lot of potential sellers over the last few weeks. Listings typically pick up in March or April, but this year it’s happening earlier,” Fernanda Kriese, a Redfin Premier agent in Las Vegas, said in a release. “Some of the sellers are listing because they bought just a few years ago and their home value isn’t increasing as quickly as they’d like, so they’re cutting their losses and moving to a less expensive home. Some are retirees who are downsizing. Buyers have been sidelined this year because of high mortgage rates and uncertainty surrounding politics and the economy, but some are starting to come off the fence.”