The U.S. housing market continued to show signs of normalizing in December, with inventory and time on market increasing and listing price growth moderating, according to a new report from Realtor.com®. After the frenzy of the past two years, this suggests good news for homebuyers in the new year with more options and more time to make a decision.
Realtor.com’s Monthly Housing Trends Report for December found that the active inventory of homes for sale grew 54.7% year-over-year, but is still below pre-pandemic levels (-38.2% compared to the December 2017-2019 average). Both newly-listed homes (-21.0%) and pending listings, or homes under contract with a buyer (-36.8%), declined YoY. The report also shows listing price growth moderating to a single digit pace for the first time since December 2021.
December 2022 national housing metrics:
- The national median listing price went up 8.4% (to $400,000) from December 2021, up 33.4% from 2019.
- While the monthly home price growth rate has slowed from the double-digits seen during the pandemic frenzy, overall, home prices continued to rise in 2022, and the median list price was up an average 13.4% compared to the previous year.
- The national active listings went up 54.7% from 2021, down 33.4% from 2019.
- The national new listings dropped 21% from 2021, down 17.7% from 2019.
- The median days on market went up 11 days (to 67 days) from 2021, down 16 days from 2019.
- The share of active listings with price reductions went up 6.5 percentage points (to 13.6%) from 2021, up 3.3 percentage points (from 10.3%) from 2019.
Other key highlights:
- Among the 50 largest metros, 49 markets posted yearly active inventory gains in December, led by Raleigh (+226.2%), Nashville (+226.0%), and Austin (+186.6%). Only Hartford (-7.7%) saw a YoY decline.
- On average across the 50 largest metros, the number of homes for sale was up 74.6% compared to a year ago, with the most growth in active listings in the West (+110.2%), which nearly reached pre-pandemic 2019 levels (-3.9%).
- On average across the 50 largest metros, no regions saw YoY new listing increases in December, with the greatest declines registered in the West (-32.5%), followed by the Northeast (-21.8%), Midwest (-19.3%) and South (-17.2%). Newly-listed homes increased in just two markets: Nashville (4.1%) and Buffalo (+3.0%).
- The slowdown in the demand for homes has caused sellers to cut their prices. Nationally, 13.6% of active listings had their price reduced, a higher share than in December 2021 (+6.5 percentage points), but similar to the 2018 share (14.5%).
- Among the 50 largest metros, the biggest annual listing price gains were in Midwest metros (+12.2%). The markets with the biggest increases were Milwaukee (+46.2%), Memphis (+34.0%), and Miami (+20.4%).
- Southern (+9.6 percentage points) and Western metros (+8.7 percentage points) saw the greatest increases in the share of listings with price reductions. Listing prices declined in nine markets, led by New Orleans (-4.4%), Denver (-4.0%), Austin (-3.4%), Phoenix( -2.4%), and Pittsburgh (-2.3%).
- Time on market was lower across the 50 largest metros (61 days, on average) relative to the national pace, but also slowed from the December 2021 pace (+11 days).
- Forty-five metros saw an increase in time on market compared to last year, with larger metros in the West seeing the greatest increase (+18 days) followed by the South (+13 days). Metros where homes spent longest on the market compared to December 2021 were Raleigh (+36 days), Phoenix (+34 days), and Las Vegas (+33 days).
- In the five metros where time on market declined compared to last year the biggest declines were seen in Milwaukee (-16 days) and New Orleans (-5 days).
“In December, we saw both buyers and sellers pulling back as they continue to adjust to a challenging market. Buyers started 2022 facing high home prices and limited inventories, and ended the year with interest rates roughly double where they started. Despite significant cooling in sales in 2022, some indicators remain in high gear. Prices are still significantly higher and homes are selling faster compared to 2019 pre-pandemic levels,” said Danielle Hale, Chief Economist for Realtor.com®. “Although demand has softened compared to last year, pushing home price growth into single-digit territory for the first time in 12 months, moderation in home price growth may encourage more buyers to return to the market in the months ahead, and may also be welcome news for sellers aiming to sell and buy at the same time. Affordability will remain a challenge and buyers will want to keep a close eye on their potential mortgage payment – a mortgage calculator is a great way to do this.”
For the full report, visit https://www.realtor.com/research/december-2022-data/.