In a signal of the housing market’s continued rebalancing, the supply of homes for sale rose at a record annual pace of 67.8% in February, the sixth month in a row, according to a new report from Realtor.com. In addition, home price growth, while continuing to rise, slowed to a pace of 7.8%, a sign of still-high hopes from home sellers entering the market.
Realtor.com’s Monthly Housing Trends Report for February found that the median listing price grew to $415,000, up 40.1% from 2019. Active listings were down 47.5% from 2019, and new listings fell 15.9%. Median days on the market rose by 23 days to 67, down 17 days from 2019. The share of active listings with price reductions grew 7.6 percentage points to 13.3%, down 2.7 percentage points from 2019, with southern metros (+10.3 percentage points) seeing the largest increase in the share of listings with price reductions.
- Across the 50 largest metros, the number of homes for sale was up 86.0% compared to last February, with the most growth in active listings in the South (+141.4%).
- Among the 50 largest U.S. metros, 49 markets saw active inventory gains in February compared to last year, but only Las Vegas, Austin and San Antonio saw higher levels of inventory compared to typical February 2017–2019 levels. Hartford (-8.8%) was the only metro to see inventory decline on a YoY basis.
- Six metros saw the number of newly listed homes increase over last year, led by Raleigh (+14.8%), Dallas (+10.3%) and San Antonio (+10.2%). The largest yearly decline in newly listed homes were in western metros, including San Jose (-43.3%), San Francisco (-39.4%), and Seattle (-36.8%).
- Among the 50 largest U.S. metros, the biggest annual listing price gains were in Midwest metros (+11.9%, on average). The metros with the biggest asking price increases were Milwaukee (+48.8%), Memphis (+42.7%), and Virginia Beach (+16.3%); however, in these metros the mix of inventory also changed and more larger, expensive homes are for sale today.
- Listing prices declined in eight markets, led by Austin (-8.0%), New Orleans (-7.0%), and Pittsburgh (-6.9%). In those markets, the median price-per-square-foot also declined on a yearly basis, signaling that price declines weren’t from a rise in smaller homes for sale but by sellers adjusting their expectations and sales price.
- Time on market was lower across the 50 largest metros in February (56 days, on average) and was 19 days slower than the pace last year.
- Compared to last year, 47 out of 50 metros saw an increase in time on market with larger metros in the West seeing the greatest increase (+26 days). Austin (+52 days), Raleigh (+51 days), and Las Vegas and Denver (+38 days) saw the greatest increases in time on market.
- Only one market saw shrinking time on market and two were unchanged from last year: Hartford (-2 days), Cincinnati (+0 days), and Buffalo (+0 days).
“In a market with conditions that don’t particularly favor buyers or sellers, both will likely have to make compromises to make a deal happen,” said the author of the report. “As mortgage rates continue to fluctuate and increase the cost of buying a home, it’s important for sellers to price their home appropriately to attract buyers in the market. For buyers, it’s critical they make the best offer they can on a home that fits their needs and budget.”
Danielle Hale, Chief Economist for Realtor.com, commented that “The number of homes for sale on the market is up significantly from a year ago, even though fewer homeowners have listed their home for sale in recent months. High home prices and mortgage rates continue to cut into buyer interest and homes are taking more than three weeks longer to sell than last year. With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
Clare Trapasso, executive news editor at Realtor.com, added that “For many, shopping for a new home often begins or picks up as we head into the warmer months, which is right around the corner. Potential buyers looking to take advantage of more homes to choose from and a less competitive pace also have more negotiating power than they did a year ago. So if a home has been on the market a while without receiving any offers, they may want the seller to contribute to their closing costs, make expensive repairs, or even buy down their mortgage rate.”
For the full report, including more in-depth housing metrics on the 50 largest metros, visit https://www.realtor.com/research/february-2023-data/.