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The summer selling season has been anything but hot, and sellers are hoping for a boost before the fall. New listings continue to flood the market, adding to the active inventory which climbed 23.7% year over year, according to Realtor.com® Weekly Housing Trends report.
“We are just getting past the peak of the selling season traditionally, and home sales tend to slow through the rest of the year as kids get back to school and families settle in,” explains Joel Berner, senior economist at Realtor.com®.
“That is not to say that there’s no hope for a late-summer or early-fall pickup in activity, but this year’s peak season has been unusually quiet as the high costs of homeownership keep many out of the market.”
The increase in active inventory reflects the 90th straight week of annual gains, with more than 1.1 million homes for sale. It marks the 12th consecutive week over the million-listing threshold—the highest inventory level since November 2019.
But buyers aren’t budging, despite mortgage rates slightly inching down to 6.72% for the week ending July 31, according to Fannie Mae.
“Falling mortgage rates will be the thing that helps the housing market the most, but without any rate cuts from the Federal Reserve this week, we may not see better rates for some time,” says Berner. “Sellers obviously don’t want to have to cut prices, but lowering their home price expectations (without giving up altogether) in a broader way may have the effect of stirring up demand as well.”
Listings overload
Realtor.com economists found that active inventory is growing faster than new listings—which indicates that more homes are sitting on the market longer.
The new listings, which measure the amount of sellers putting homes up for sale, that came on this week grew by 5.8% year over year. The good news is that it was a bit lower than last week, when new listings grew 7.2% year over year.
With the flood of home listing inventory, homes spent seven days longer on the market than a year ago. Sellers are having to wait longer for their homes to move. This leaves them in a precarious situation: They either lower their list price or delist (take their home off the market).
“Price cuts are a reality of the market even in good times, but this year so far has seen an increased level of them,” adds Berner. “This trend has started to taper off a bit, but the share of homes on the market reducing their prices remains higher than the last several years.”
The report found that price reductions and delistings are both up this summer.
The median list price remained the same—the first week without year over year growth since May. But the median list price per square foot rose 0.5% year over year and has not fallen in nearly two years. This indicates that the mix of homes for sale is starting to favor smaller and less-expensive inventory.
“Price cuts are good for the market—they show that it has some flexibility to move the inventory available to it, which is also up this summer,” explains Berner. “They are unfortunate for sellers, especially those whose expectations are tied to prices from a few years ago that are no longer sustainable.”