With interest rates hovering around 3.6% for a 30-year fixed mortgage, the lowest level since the fall of 2016 according to Freddie Mac, potential homebuyers are feeling an almost irresistible push to get into the market. According to realtor.com, that irresistible push is putting snowballing pressure on already tight housing supply.
Since the beginning of this year, stalled supply growth has morphed into no growth. In fact, according to realtor.com, the number of newly listed properties in July 2019 fell -7% from one year ago.
This -7% decline in new listings could lead to increasing inventory declines sooner than originally predicted by realtor.com and could also be discouraging potential sellers from selling.
Despite a rise of +5.5% to $315,000 as the national median home price in July, this rise is actually a fall from an 8.7% annual price growth. Short term, July 2019’s prices were down -0.2% from June 2019, “…marking this the earliest seasonal slowdown in home prices since 2016,” according to realtor.com.
George Ratiu, the senior economist with realtor.com, said, “July’s data highlight tension in the housing markets between buyers eager to take advantage of lower mortgage rates and potential sellers concerned about slowing price growth. The decline in newly listed properties suggests that some would=be sellers are stepping back from the market, during the peak buying season, when most people are searching for their next home.”
Properties priced below $200,000 saw inventory drop -9.9% y/y in July 2019. Properties prices above $750,000 saw inventory increase +6.6% y/y.
Thank you to Mansion Global’s Liz Lucking for source data.