Weekly Housing Trends View — Data Week Ending July 16, 2022

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In addition, we continue to give readers more timely weekly updates, an effort that began in response to the rapid changes in the economy and housing as a result of the COVID-19 pandemic. Generally, you can look forward to a Weekly Housing Trends View and the latest weekly housing data on Thursdays with a weekly video update from our economists on Fridays. Here’s what the housing market looked like over the last week.

What this Week’s Data Means:

This week marks the second consecutive week of fewer homeowners deciding to sell. Fortunately for buyers, the dip is lower than last week’s, but this is an important indicator to watch closely. As noted a few weeks ago, the recent trend toward balance in the housing market could be thrown off if seller participation lost momentum. The recent new listings declines hint at that possibility.  

The housing market and consumers trying to buy and sell homes today continue to react to the rapid run-up in mortgage rates that, along with rising home prices, have pushed the cost of financing today’s median for-sale listing to around $2,000, up from $1,300 just one year ago. Especially for first-time buyers looking for relative affordability, monthly starter home costs were $2,437 in June – that’s $561 higher than rents. The adjustment is still playing out. Fewer buyers and sellers got to a closing table in June, as high costs and concerns about the economic outlook dampened homebuyer enthusiasm. As homebuyer demand wanes, builders have grown concerned, pulling back on single-family home construction, pivoting instead to start more multi-family homes in June. 

Homebuyers in today’s market still have options, but it’s more important than ever to be on top of the trends. Buyers should rate-test their budgets, so that they know how to react in case mortgage rates climb again, as they are likely to do heading into the fall.

Key Findings:

• The median listing price grew by 16.6% over last year.  The typical asking price of for-sale homes was up from last year by double-digits for a 31st week.  Still, even though we’re not yet seeing it in the weekly asking price data, other data are signaling an adjustment in market balance. As we noted in our June Housing Trends Report, even though home prices hit a new high of $450,000, the share of listings with a price cut was nearly double its year ago level. As inventories increase and balance returns to the housing market, we expect to see home price growth ease lower in the second half of 2022.  Seasonally, we typically see the median home listing price top out around this time of year, and this year is likely to be typical in that respect. 

• New listings–a measure of sellers putting homes up for sale–were down 3% from one year ago.  This week marks a second year over year drop in the number of new listings coming up for sale, suggesting that some homeowners may be growing wary of the market’s recent shift toward more balance and what it could mean for selling. Homeowners trying to decide if now is the time to list their home for sale are still in a good position in many markets across the country as a decade of rising home prices gives them a substantial equity cushion, and buyer interest has helped homes move quickly, shortening the typical home sale timeline. In fact, homes sold in June spent a record low time on market. Time on market is expected to increase from its recent record lows, but data continue to suggest that homes priced well are selling.

• Active inventory continued to grow, rising 29% above one year ago. With fewer owners listing homes for sale this week and last, the rapid recent run-up in active inventory has stalled somewhat. Inventory was roughly even with last year’s levels at the beginning of May and the gains mounted each week until early July. Since then, the market has stabilized just shy of a 30% increase over year ago levels. This is a welcome improvement for shoppers, but the market still lags what was once normal. Our June Housing Trends Report showed that the active listings count remained less than half its June 2019 level and just shy of two-thirds its June 2020 mark. Put another way, today’s shoppers have more options, but the market needs even more before the selection is on par with the pre-pandemic or even the early-pandemic housing market.

• Homes spent just 1 less day on the market than this time last year. The time on market gap relative to last year is closing. In fact, the Realtor.com June Housing Trends Report showed that although homes spent less time on the market than one year ago, they sat for slightly longer than in May, marking the first time in three months that a new record low was not set. This is due to both seasonality and cooling buyer demand amid cost pressures alleviating some of the urgency. More homes for sale will eventually bring more balance to the housing market, and should give buyers more time to make decisions.

Data Summary:

Subscribe to our mailing list to receive updates and notifications on the latest data and research.