In this blog post, I will discuss the latest developments in the US housing market,
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The Current State of the US Housing Market
In this blog post, I will discuss the latest developments in the US housing market, including housing prices, inventory, and price reductions, among other things.
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Housing inventory is decreasing US Housing Market
Since November of last year, housing inventory has been on a downward trend, despite increases on a year-over-year basis. However, inventory levels have been flat or decreasing since March, which is unusual. Typically, inventory levels begin to increase around March each year, but this year, inventory levels are actually decreasing. This is likely due to a decrease in new listings.
New listings are decreasing
In the past 36 weeks, new listings have decreased by double digits in 34 of those weeks. Last week, new listings decreased by 22 percent for the third consecutive week. This has contributed to the decrease in overall inventory levels.
Despite this, inventory levels have increased
According to Realtor.com, despite the decrease in new listings and inventory levels, overall inventory levels have increased by 53 percent.
US Housing Market Update
Asking prices in the US increased by only 4.4% last week, the smallest increase going back to May of 2020. Housing inventory rose by 53% on a year-over-year basis last week according to Realtor.com.
The average 30-year fixed-rate mortgage rates are now around 6.2%, according to the Morris News Daily as of April 6, 2021. That’s up from the 5.1% that we saw one year earlier. Mortgage rates have been decreasing for the past one month.
Housing affordability is still an issue, especially compared to the past couple of years, but it has improved compared to one month ago. The share of price drops is at least a four-year high during that same time frame, and number five houses are taking longer to sell.
This is not a repeat of the past couple of years where housing demand was absolutely skyrocketing, and number five sellers as well as home buyers have exited this housing market leading to a dip in new listings and contracts being signed between buyers and sellers. If homeowners continue to not be interested in selling, that will limit housing inventory, which of course, will put upper pressure on prices again.