These new pendings prices rose by 1.25% this week, to $395,000 and are 5% greater than a year ago.
In the last two years, when October had sharply higher mortgage rates, home sales were tanking and prices were dropping. The opposite is happening now. I don’t expect this to continue. But, this is a stronger signal than I expected for resilience of the homebuyer. This is the price point people are buying. This recent trend implies that the yearly home price appreciation has a little more room than we’ve been expecting.
The median price of all the homes on the market is now $440,000, that’s unchanged from last year.
Inventory is up
The available inventory of unsold homes on the market ticked up to 734,000 single-family homes. That’s up half a percent for the week and is 36.7% more homes on the market than a year ago.
Some of the Sunbelt states, like Arizona, Texas and Florida haven’t topped out with inventory yet. Texas has 44% more homes on the market that last year and 24% more unsold homes on the market now than in 2019. Arizona has 70% more homes on the market now than a year ago. Nationally, we have 36.7% more homes unsold than last year, but we’re still 23% fewer homes on the market now than in 2019. There are eight states with more inventory now than in 2019.
In addition, we see hurricane impact in North Carolina, Georgia and Florida with fewer new listings, more withdrawals, and fewer new pendings.
Asheville metro had a 40% drop in sales during the week. And it’ll probably drop further this coming week.
New listings
There were 61,000 new listings unsold this week — down a few percentage points for the week and a fraction more than a year ago.
The immediate sales are at their lowest levels since we started tracking during the pandemic. These are the bidding wars and homes that get offers immediately after listing. These are the best homes in the best locations that are properly priced and well marketed. It’s notable that, while we’re measuring a slight pickup in total sales and the prices being paid are holding firm, the urgency of buyers is not increasing. Homebuyers are in a much stronger position than they have been in many years.
Price reductions stay flat
Just about 40% of the homes on the market have taken a price reduction from the original list price. This percentage has been staying flat for a couple months now. One way to measure the slight improvement in homebuyer demand over the last month is that price reductions haven’t climbed at all.
Rates spiked in the autumn of 2022. At that time, the pace of withdrawals accelerated and price cuts climbed.
It’s wild how quickly the sentiment can change in a week. We were maybe at a transition point to see some home sales growth, and suddenly we had a big mortgage rate spike. Buyers can put the brakes on quickly.
Mike Simonsen is the founder of Altos Research.
