Springtime ushers in new life, greener grass, blooming flowers and homebuying excitement. And this year, it will also bring considerably higher listing prices according to realtor.com®’s February Housing Report. Last month, median listing prices hit a record high of $392,000. What’s more, several of the nation’s 50 largest metros, including Las Vegas, Miami and Tampa, all saw increases of at least 31%.
For the first time since the fall of 2021, inventory declines improved slightly in February. During the last two weeks of the month, more new sellers entered the market than during the same time last year. But with a deficit of 5.8 million new homes missing from the market and more and more millennials looking to become first-time buyers, the housing supply faces plenty of headwind. Geopolitical uncertainties in Europe could also impact consumer confidence and potentially slow homebuying and selling.
Key findings:
- The U.S. inventory of active listings declined 24.5% YoY in February, improving slightly over last month’s annual gap (-28.4%). However, there were still 122,000 fewer available listings than during a typical day in February 2021 and inventory was down 62.6% from February 2020.
- Relative to all active inventory, annual declines in new listings improved more significantly in February, down just 0.5% nationwide versus the 9.1% drop registered last month. Additionally, new listings grew on a year-over-year basis in the final two weeks of the month.
- Inventory remained below February 2021 levels in 46 of the 50 largest U.S. markets, but grew in Riverside, California (+6.3%), Phoenix (+4.2%), Austin, Texas (+1.5%) and Sacramento, California (+0.3%), marking the first month that supply increased in any large metro since October 2021.
- In another early Spring sign of rising for-sale homeoptions, more new sellers entered the market than last year in nearly half (23) of the 50 largest markets. Furthermore, seven of these metros posted double-digit annual new listings gains: Milwaukee (+21.9%), New York (+19.5%), Oklahoma City (+16.3%), Kansas City (+15.6%), Philadelphia (+15.5%), Portland, Oregon (+12.5%) and Birmingham (+11.6%).
- In February, the typical U.S. homespent 47 days on market, over two weeks faster (-17 days) than in 2021 and over a month (-38 days) faster than typical February timing from 2017-2019.
- Homes moved even more quickly in the 50 largest U.S. metros, at an average of 39 days on market in February. Homes sold in the least amount of time, at 16 days or less each, in Denver, San Jose and Nashville.
- Among large metros, February’s biggest declines in time on market were registered in Miami (-34 days), Orlando (-29 days) and Indianapolis (-21 days). Time on market increased in just three metros, which were Buffalo. (+10 days), Oklahoma City (+6 days) and Cincinnati (+4 days).
The takeaway:
“Over the last five years, we have seen home prices break records early in the season as buyers try to get ahead of the competition. But this is the first time the record has been broken in February, signaling that competition is already heating up weeks before the start of the Spring buying season in a typical year,” said Realtor.com® chief economist, Danielle Hale. “While the number of homes on the market remains woefully behind buyer demand, in February, we saw declines in new listings improve for the first time since November 2021, indicating potential hope on the horizon. Whether inventory continues to improve will depend on a variety of economic and geopolitical factors, including the conflict in Ukraine and mortgage rate hikes, which haven’t impacted home sales or price growth so far, but will increasingly lessen buyers’ purchasing power.”
“It can be easy to get swept up in competition, so buyers should take the time to assess how higher mortgage rates could impact the affordability of monthly payments and consider adding a cushion at the top of their budgets. Tools like the Realtor.com® Mortgage Calculator can help you scenario-plan for various rates so you’re better prepared—not only for a successful buying experience, but also to comfortably afford your monthly housing costs once you have the keys in-hand,” said George Ratiu, manager of economic research and Senior Economist at Realtor.com®.
