Showing a home for sale in Austin, Texas on May 22, 2024.
Brandon Bell | Getty Images
There is good news for the real estate market in 2024: the supply in the real estate market has increased significantly. The bad news: A lot of the supply is out of date and sitting unsold for much longer than usual.
Redfin’s latest report shows active listings increased 12.1% in November compared with November 2023, reaching the highest level since 2020.
However, more than half (54.5%) of those homes had been on the market for at least 60 days without a sales contract. This is the highest proportion for November since 2019 and an increase of nearly 50% from the previous year, the report said.
Data from Redfin shows the typical home under contract took 43 days to complete, the slowest November pace since 2019.
“A lot of the listings on the market are either old or uninhabitable. There’s a lot of inventory, but it doesn’t feel like there’s enough,” Redfin agent Meme Loggins was quoted as saying in the report. “I explain to sellers that if the price isn’t fair, their home will be Stay on the market. Homes that are reasonably priced and in good condition will be off the market within three to five days, but overpriced homes may stay for more than three months.”
Mortgage rates surged over 7% in October and mostly stayed there through the end of the year, according to the report Daily Mortgage News. Home prices also continue to rise. S&P CoreLogic Case-Shiller’s latest monthly price report released on Tuesday showed that national home prices rose 3.6% in October from a year earlier.
“Our country indexes are showing continued improvement based on the latest data from the pre-election period,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “The removal of the risk of political uncertainty has led to a rebound in equity markets; It would be telling if a similar sentiment emerged among homeowners.”
Pending home sales, a measure of existing home purchase contracts, rose to their highest level in nearly two years on both a monthly and annual basis in November, according to the National Association of Realtors. However, they got off to a very slow start. Real estate agents claim interest rates are now at the new normal.
“Consumers appear to have recalibrated their expectations for mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% over the past 24 months. %. Buyers are no longer waiting or expecting mortgage rates to drop significantly, and buyers are in a better negotiating position as the market turns away from a seller’s market.”
However, a slowdown in sales doesn’t bode well for the new year, especially as interest rates remain high. According to a separate report from Redfin, demand is still there, but renters are staying longer, not just because of rising home prices but also because of higher prices from brokers and moving companies.
According to CoreLogic’s year-end report, the seller lock-in effect did begin to ease in 2024, with some sellers not wanting to trade up for lower mortgage rates, but this was largely due to life events or the need to tap into accumulated equity. The increased inventory didn’t have much of an impact on sales due to cost hindrances.
“Buyers are struggling to keep up with home prices. The cost of owning a home, adjusted for inflation, is now at its highest point in decades. Continued increases in prices and interest rates have created a challenging environment for first-time buyers. CoreLogic Chief Economist Selma Hepp wrote in the report.
