US real estate: rising home listings amid sluggish sales

“The market is slowing down. Homes are taking longer to sell, allowing inventory to accumulate,” stated Redfin chief economist Daryl Fairweather.

The housing market is experiencing an uptick in new listings as more homeowners decide to sell their properties. However, these homes are taking longer to sell due to high prices and interest rates, creating a challenging environment for potential buyers.

Increase in Home Listings

New listings from home sellers surged by 13% in May compared to a year ago, according to the latest market report by Zillow. “You have an increase in sellers coming back on the market,” said Orphe Divounguy, a senior economist at Zillow.

Despite this influx, the market has not seen a corresponding rise in buyer activity, leading to an increase in available inventory. Zillow found that the number of homes on the market rose by 22% compared to last year.

Homes Taking Longer to Sell

“Homes are staying on the market for a bit longer because the sales are not keeping up with the flow of homes coming on the market,” Divounguy explained.

This trend is evident in data from Redfin, which revealed that nearly two-thirds (61.9%) of homes listed in May had been on the market for at least 30 days without going under contract. Additionally, 40.1% of homes for sale in May had been listed for at least two months without a contract.

Market Slowdown

“The market is slowing down. Homes are taking longer to sell and that allows inventory to accumulate on the market,” said Daryl Fairweather, chief economist at Redfin. Despite the recent increase in supply, the market is still experiencing a shortage of inventory.

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According to Zillow, the current housing inventory in the U.S. is 34% below pre-pandemic levels. “We’re short nationwide of about 4.3 million homes,” Divounguy noted. “We’re still in a housing unit deficit.”

Buyers Await Lower Mortgage Rates

High mortgage rates and strained housing affordability have kept many potential buyers from entering the market.

“Buyers are facing these incredibly high mortgage rates, at least relative to what they were during the pandemic,” said Fairweather.

The 30-year fixed-rate mortgage in the U.S. slid to 6.95% on June 13, slightly down from 6.99% the previous week, according to Freddie Mac data via the Federal Reserve.

Conclusion

The housing market is currently in a state of flux, with increased listings but slower sales. High mortgage rates and affordability issues continue to deter buyers, leading to longer times on the market for listed homes.

As the market adjusts, both buyers and sellers will need to navigate these changing dynamics.