Summary
The housing market is changing. Is it now a buyer’s market? Recent data on home prices, inventory, and the time homes spend on the market reveals some surprising trends. Rising interest rates are transforming the real estate landscape. But what does this mean for both buyers and sellers? We examine how these rising interest rates are affecting affordability.
Report
November data from Realtor.com shows that rising mortgage rates continue to hamper the momentum in new listing growth we saw in October. The number of total active listings climbed to highs not seen since before the COVID-19 pandemic. In addition, high interest rates in November led to the slowest housing market since January and the slowest November in five years. In November, the number of homes for sale increased by 26% compared to November 2023. It is the 13th month of annual inventory growth and the second highest level since December 2019.
However, the November inventory growth rate has slowed from October’s 29%. It is the fourth consecutive month of decreasing growth rates. While the November inventory showed continued improvement, it is down from October’s 21% gap. The total number of homes for sale, including those under contract but not yet sold, increased by 22.5% compared with November 2023, growing annually for the 12th month in a row.
In November, seller activity increased, with new home listings up 2% compared to November 2023, but a notable decrease from October’s increase of 4.9%. Due to higher interest rates affecting home buying power, fewer new sellers are entering the market than in the previous two months. The typical home spent 62 days on the market this November, 4 more days than in October, and 11 more days than November 2023. It was the slowest November since 2019, the 8th month in a row in which homes spent more time on the market than the previous year.
The national median homeless price in November was $416,880, which is $8,000 less than in October and just 0.7% lower than November 2023. However, when a change in the inventory mix towards smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.
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