Would-be sellers are pulling back as it becomes more clear the housing market is tilting in buyers’ favor in much of the country.
New listings of U.S. homes for sale are up 2.5% from a year ago, the smallest increase in five months. On a local level, new listings are falling in 20 of the 50 most populous U.S. metro areas, with the biggest declines in Tampa, FL (-15.2%), San Antonio (-14.4%), and Orlando, FL (-11.1%).
There are still hundreds of thousands more home sellers than buyers nationwide. But some would-be sellers are sitting on the sidelines as the market tilts more and more in buyers’ favor in much of the country.
“Understandably, sellers want to get as much money as they can. Some homeowners feel they missed the prime selling window; many people who don’t need to sell right now are holding off, either staying put or trying to rent out their house,” said Kathy Scott, a Redfin Premier agent in Phoenix. “The advice for people who do need to sell–I’m working with one couple that’s moving out of the country, for example–is to set realistic expectations. Talk to your agent about the market in your exact neighborhood: How long are homes taking to sell, are they typically selling below asking price, and what are sellers doing in terms of repairs and concessions to get deals done? Price fairly based on those numbers.”
Pending home sales fell 2.3% year over year during the four weeks ending June 22, the biggest decline in three months. There are two key reasons why home sales are slow. One, housing costs are still soaring, with home-sale prices up 1.6% year over year to a record high and mortgage rates sitting near 7%. Two, many would-be buyers are holding off due to widespread economic uncertainty and recession jitters.
It’s worth noting that early-stage homebuying demand ticked up slightly this week. Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of tours and other buying services from Redfin agents–has increased 6% over the last two weeks, and ShowingTime data illustrates that house tours are rising faster this year than last year.
