Housing data reported in RISMedia Daily News this week continue to reflect what all the experts forecasted for the beginning of 2022: homebuying competition is showing no signs of slowing.
As this week nears its end, another indicator, realtor.com®’s latest Weekly Housing Trends Report, reveals that as homes continue to sell more quickly than last year, asking prices are accelerating at a double-digit pace, while inventory continues to remain limited.
Key findings:
- The U.S. median listing price increased 11.8% over last year, making the seventh straight week of double-digit gains and the highest annual growth rate since June 2021. With rising mortgage rates driving up monthly housing costs, buyers have plenty of motivation to outbid the competition for limited affordable inventory. Recent growth in new home sales also suggests buyers are feeling a sense of urgency to lock in rates.
- New listings—a measure of sellers putting homes up for sale—were down 7% year-over-year. New listings have trended below historical levels for nine of the past 11 weeks, leaving buyers with limited for-sale home options. However, some research suggests the new listings trend will begin to improve later this year: The majority of surveyed prospective sellers plan to list within the next 6 months, and single-family home construction continues at a 1 million+ pace.
- Active inventory was down 28% from a year ago, with the annual rate of declines remaining flat over the prior week. As buyer interest continues to outpace seller activity, inventory is consistently falling short of historical levels. Although a smaller number of homes for sale creates challenges for buyers and sellers – many of whom will also be buying a home—it’s also a reflection of strong buyer demand, largely thanks to a roaring labor market that has unemployment below 4%.
- Time on market was down 12 days from last year, accelerating from the pace seen over the previous four weeks. With fewer homes for sale now than this time last year, successful buyers must move quickly, which can be particularly challenging for first-time buyers. Americans looking for their first home might find better opportunities in smaller, but growing, markets with relatively affordable housing inventory, strong economies and high quality of life.
The takeaway
“While we expect this year’s buyers will eventually see some relief from the 2021 frenzy, home shoppers continue to face challenging conditions in the early days of 2022. In fact, last week’s home price and time on market trends suggest competition intensified,” said realtor.com Chief Economist Danielle Hale. “Americans who put ‘find a new home’ on their list of New Year’s resolutions have found plenty of company in fellow buyers so far this year, but few participants aiming to sit on the other side of the closing table. Inventory declines remain consistent due to the mismatch of supply and demand, which stems from the combination of recent months’ new listings dips and the past decade of underbuilding in new construction. For buyers—and especially first-timers—new sellers will be key to successfully finding a home in 2022.”
To view the full report, click here.
