Active listings soared 33.5% year-over-year to their highest level since 2020, according to data from the Realtor.com Monthly Housing Trends Report for October suggests that fewer homebuyers could afford to take advantage of increased inventory availability as time on market continues to climb amid inflated listing prices.
- The national inventory of active listings increased by 33.5% over last year.
- Total inventory of unsold homes, including pending listings, was up only 0.5% year over year due to lower pending inventory (-30.0%).
- Sellers are less active than a year ago, with newly listed homes down 15.9% year over year.
- The median list price rose 13.3% in October and is slowly decelerating.
- Time on market was 51 days, 6 days more than last year but 20 days less than typical pre-pandemic levels.
While the inventory of homes actively listed for sale continued to grow, this growth in active inventory was primarily due to the typical home spending more time on the market than last year as seller sentiment remained scarce and fewer homes came up for sale compared to the previous year. . Meanwhile, overall listing price growth remained in the double digits, but continued to moderate.
“As rapidly rising rates are reshaping housing market dynamics this fall, buyers and sellers are taking a step back to recalibrate their plans. Homebuyers are looking at a monthly mortgage payment of around $1,000 higher than the same time last year, and incomes are increasing, but not that much. Combined with asking prices that continue to rise at a double-digit annual rate, the average American has suffered a major blow to their purchasing power,” said Danielle Hale, chief economist for Realtor.com. “Nevertheless, our data indicates that some aspiring homeowners are finding ways to make the most of inventory conditions, such as exploring relatively affordable subways. For buyers with the flexibility, relocating to a lower-priced market could help offset higher mortgage costs. There’s also a takeaway for sellers in these areas – on a well-priced home, you might still see strong interest from these foreigners.”
Inventory recovery accelerates amid rising rates and moderating demand
In October, the supply of active listings in the United States grew at a record pace1 annual pace and topped 2020 levels for the first time, even as new sellers fell year-over-year for the fifth straight month. Additionally, pending listings or homes under contract with a buyer continued to decline. These trends indicate that the accelerated improvement in inventories in October was largely due to moderating buyer demand, fueled by mortgage costs rising at a faster rate than inflation and incomes. While some slowdown in seller participation is typical in the fall, the significant declines in new listings this year reflect the impact of homebuyers’ diminishing purchasing power on sellers’ sentiment. However, sellers may still see strong competition among buyers for fewer options in some areas, with inventory still lagging. October 2020 levels in the Northeast and Midwest, regions where declines in home sales have also been more modest.
- Nationally, active inventory rose 33.5% year-over-year in October, hitting the highest level in 24 months. Meanwhile, newly listed homes (-15.9%) and pending listings (-30.0%) were down year over year.
- Among the 50 largest U.S. cities, 42 markets posted annual active inventory gains in October, led by Phoenix (+173.9%), Raleigh, North Carolina (+167.4%) and Nashville, Tennessee. (+145.0%). The number of homes for sale was still down year-over-year in the remaining eight markets, by the largest amounts in Hartford, Conn. (-25.7%), Virginia Beach, Virginia. (-11.0%) Milwaukee (-9.6%) and Chicago (-9.6%).
- On average across the 50 largest cities, no region saw a year-over-year increase in new listings in October, with the largest declines in the West (-20.6%), followed by Northeast (-17.4%), Midwest (-15.0%) and South (-9.8%). Additionally, newly listed homes increased in just four markets: Nashville, Tennessee. (+10.5%), New Orleans (+6.2%), dallas (+5.6%) and San Antonio (+1.4%).
- Compared to October 2020active inventory was higher in 32 of the 50 largest markets, led by West (+33.9%) and South (+7.2%) metro areas: Phoenix (+132.0%), Austin, TX (+120.8%), Riverside, California. (+67.2%), Memphis, TN. (+59.7%) and Nashville (+55.7%). Inventories remained lower than two years ago in the Northeast (-21.1%) and Midwest (-7.9%).
Competition stagnates as home listing prices and time on market hold
With home sales and affordability falling in October, national trends reflected a market in which competition continued at a calmer pace than during this year’s summer peak. However, compared to last month, there was little change in listing prices and time on market. This can be partly attributed to regional variations in supply and demand dynamics, with the continued strong interest of home buyers in relatively affordable markets offsetting the slowdown in other regions. In the Midwest and Northeast, where buyers saw relatively weaker inventory improvements in October, time on market and share of homes with price reductions showed weaker year-on-year increases on the other than in other regions.
- In October, national listing price trends remained relatively unchanged from the previous month, with the median listing price falling by just $2,000 at $425,000. In addition, annual growth in home listing prices slowed slightly, to 13.3% from 13.9% in September.
- On average across the 50 largest US cities, annual listing price growth entered single-digit territory in October (+9.2%). However, prices for homes for sale continued to rise in double digits year-over-year in 20 markets, led by Milwaukee (+34.5%), Miami (+25.1%) and Kansas City (+21.4%).
- The share of homes with price cuts rose 10.3 percentage points to 20.9% in October, well above levels in 2017 (18.1%) and 2019 (17.0%), but just below the 2018 share (21.2%). The West (+18.9 percentage points) and South (+13.6 percentage points) metropolitan areas showed the largest increases in the share of price reductions: Phoenix (+35.9 percentage points), Austin (+31.2 percentage points) and Vegas (+24.4 percentage points).
- The typical home spent 51 days on the market in October, six days more than last year, but still 20 days faster than the typical pace for 2017-2019. The metros where homes have spent the longest time on the market compared to October 2021 were Raleigh (+27 days), Austin (+26 days), Phoenix (+21 days) and Vegas (+21 days).
- Time spent in market fell year-on-year in October in 10 of the top 50 cities, led by New Orleans (-21 days), where last year’s pace was impacted by Hurricane Ida, followed by Richmond, Virginia. (-15 days) and Birmingham, Alabama. (-6 days).
Spotlight: Rising housing costs are fueling demand from out-of-town homebuyers
Similar to October Home For Sale Trends, the Realtor.com Third Quarter Inter-Market Demand Report also released today highlights regional variations in home buying activity. With rising rates pushing the typical monthly mortgage payment up 77.1% in October from a year ago, some buyers are potentially trying to add room to their budget by looking further from where they live. low cost houses.
Nationally in Q3 2022, 60.7% of ad views on Realtor.com came from users outside of the ad’s metro area, up from 56.9% in the prior quarter and 52.1% at the same period last year. Regionally, homebuyers in the Northeast (69.0%) and West (65.7%) were the most likely to search off-market in the third quarter. This can be attributed to buyers looking for a relatively affordable price, as median October listing prices were higher in major Northeast metropolitan areas. ($440,000) and West ($763,000) than in other regions, on average.
To read the full report, including more data, charts and methodology, Click here.