Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In addition, we continue to give readers more timely weekly updates, an effort that began in response to the rapid changes in the economy and housing as a result of the COVID-19 pandemic. Generally, you can look forward to a Weekly Housing Trends View and the latest weekly housing data on Thursdays with a weekly video update from our economists on Fridays. Here’s what the housing market looked like over the last week.
What this Week’s Data Means:
The real estate refresh continued this week, building on momentum that began two weeks ago as inventory evened out for the first time since June 2019 and continued last week as inventory grew by the largest jump since March 2019. Today’s data shows the biggest year over year jump ever observed in our data history, and the rising number of home sellers suggests that more increases may be ahead. As we see more new sellers and overall inventory improves, eventually tipping market conditions in a buyer friendly direction, this may somewhat surprisingly reinforce the trend and add even more sellers. Our research shows that nearly 3 in 4 home sellers this year is also planning to buy a home, so what’s good for the buyer is also, in many cases, good for the home seller
- The median listing price grew by 16.6 percent over last year. The typical asking price of for-sale homes was higher than one year ago by double-digits for a 23rd week. Mortgage rates have steadied in recent weeks as markets have grown increasingly cautious about the economic outlook as the Fed undertakes its monetary normalization which has already involved the largest rate hike in 22 years and similarly large hikes are expected ahead. With higher mortgage rates raising the monthly cost of mortgage payments housing affordability is dropping unless incomes rise substantially or home price growth recedes. While incomes are rising faster than they have historically as the jobs market remains tight, we have not seen slower growth in typical asking prices, but rather the opposite. One explanation for this observation is that despite slipping confidence, consumers widely believe that cost increases will continue, as mortgage rates are expected to continue to rise, giving a strong reason to make a purchase sooner rather than later for those who want to buy within a somewhat near-term timeframe. This may be especially true for first-time home buyers, many of whom are also contending with rents continuing to grow 4-5x faster than pre-pandemic, are feeling particularly pressured in this housing market. With recent data showing weakness in new home sales and existing home sales, this sense of urgency is not expected to continue with the same intensity.
- New listings–a measure of sellers putting homes up for sale–were up 6% above one year ago. After several years of abnormal seasonality, it is heartening to see more new sellers in May, the period of the year where we tend to see the largest number of home sellers listing for the first time. Seller confidence amid record high asking prices is driving the growth in the number of sellers this year over last which we’ve seen in 7 of the last 8 weeks. As we see more new sellers and overall inventory improves, tipping market conditions in a buyer friendly direction, this may somewhat surprisingly reinforce the trend and add even more sellers. Our research shows that nearly 3 in 4 home sellers this year is also planning to buy a home, so what’s good for the buyer is also, in many cases, good for the home seller.
- Active inventory continued to grow, rising 9% above one year ago. In a few short weeks, we’ve observed a significant turnaround in the number of homes available for sale, going from essentially flat two weeks ago, to +5% last week, to +9% this week. This is the biggest year over year gain ever observed in our weekly data history which goes back to 2017, and the first consecutive weeks of gains since 2019. This is a milestone to celebrate, but should be understood in context. Our April Housing Trends Report showed that the active listings count remained 60 percent below its level right at the onset of the pandemic. This means that April’s buyers had just 2 homes to consider for every 5 homes that were available for sale just before the pandemic. May data in summary is likely to show that even as the market is adjusting rapidly, the number of homes for sale remains limited compared to pre-pandemic conditions.
- Homes spent 6 days less on the market than this time last year. As homebuyers have a greater number of homes to choose from, we expect the competitiveness of the housing market to subside and homes to spend more time on market. However, the data do not yet show that the market has made this shift. Our April Housing Trends Report showed that homes sat on the market for less time than ever before–a feat normally not achieved until summer. While some homebuyers can make their offers stand out by making a larger down payment, others may find that acting quickly to submit an offer may give them an edge without requiring more funds. Acting quickly is an even more useful strategy in April’s Hottest Housing markets, where homes sell faster than elsewhere as a result of high homebuyer demand. One key commonality of this month’s hottest markets, which are predominantly in the South, Northeast, and Midwest is affordability.
|All Changes year-over-year||Year-to-Date 2022||Week ending May 7, 2022||Week ending May 14, 2022||Week ending May 21, 2022|
|Median Listing Prices||+13.7%||+15.8%||+15.9%||+16.6%|
|Time on Market||10 days faster||6 days faster||6 days faster||6 days faster|