Concerns that higher mortgage rates are coming spur both home buyers and sellers to act fast.
Days on the Market (DOM) Gets Faster and Faster
The latest housing data from Realtor.com indicated that during the week ending June 4, for-sale houses were snapped up 9 days faster y/y and 5 days faster than the week before ending May 28.
This ultra-fast pace of home sales will eventually cool but, according to Danielle Hale, Chief Economist with Realtor.com, not likely before the summer’s end when homes typically spend the shortest amount of time being available for sale.
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Combine summertime’s fastest pace of sales with consumer apprehension about rising mortgage interest rates and you’ve got an extended period of blazing home sales on the horizon.
Active For-Sale Inventory Growing
Realtor.com indicated that inventory was up +13% at the beginning of June. New listings to the market increased +2% y/y.
Realtor.com’s Hale believes that sellers are becoming more and more motivated to list their homes in hopes of leveraging the hot housing market before the Fed raises interest rates again throughout the summer. With inflation now higher than it’s been in 40+ years, it’s almost a given the Fed will raise rates to 0.75 points in its efforts to cool consumer spending and the economy.
Despite inventory increasing +13%, Realtor.com’s May Housing trends Report showed that the active listing count remained nearly -50% below its level at the beginning of the pandemic.
The good news? Buyers are beginning to have more options. The bad news? Home shoppers need more options.
Another Uptick for Median Listing Prices
Realtor.com reported that the median listing price jumped +16.9% y/y the week ending June 2, the 25th consecutive week that the typical asking price of for-sale homes increased by double-digits.
The hopeful sign for buyers in this +16.9% y/y price increase was that it was the first time in 7 weeks that the week’s price growth rate was slightly less than the prior week’s growth rate.
Because the typical home listing price continues to rise about three times faster than it would in a “normal” market, Hale believes that the only thing that will slow home price growth is much more available inventory from which buyers can choose.
Thanks to Realtor.com.
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