It took a while, but it’s finally happening — the number of for-sale listings on the market is rising, even during what is generally a slow season for the real-estate sector.
Active inventory of homes has hit a new peak for the year, according to data from Altos Research.
Inventory bottomed out at the beginning of March this year, and is now up 137%, according to data from the company, reported by housing blogger Bill McBride.
There were 572,000 single-family homes on the market as of Oct. 21, which was up 1% from the previous week.
“Usually by this time of the year, we have fewer new listings, and some sales still wrapping up from the summer. So inventory falls” — normally by 1 to 2%, Mike Simonsen, CEO of Altos Research, said in a video posted on October 24.
“But not this year,” he added.
“There’s so little buyer action that even with … [little] new supply hitting the market each week, fewer than normal, we still have inventory climbing each week,” he said.
And expect inventory to keep growing for a “few more weeks” until Thanksgiving, Simonsen forecasted.
“There are no precedents for inventory to keep rising this late in the year,” he added.
Homebuyers feeling a sense of doom and gloom with mortgage rates firmly above 7% may breathe a sigh of relief with this news. The 30-year fixed-rate is averaging at 7.29%, according to Mortgage News Daily.
The biggest inventory gains were in Arizona, Georgia, and Texas, Simonsen said.
In Texas in particular, the number of single-family homes on the market has jumped 10% since the beginning of September, he said.
And with this backdrop of high rates and rising inventory, price reductions are up, Altos Research showed, with “no signs of topping yet,” Simonsen said.
About 43% of the market has had price cuts, he said, as seen in his tweet below.
According to the latest S&P Case-Shiller data, home prices fell for the second month in a row in August, which last happened in 2012, according to James Knightley, chief international economist at ING.
“Demand is weakening as mortgage rates surge while housing inventory for sale is on the rise, meaning further large price falls are probable,” Knightley added. “Bad news for new homeowners, but it can help to get broader inflation lower quickly.”
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]