For several weeks, I’ve been reporting data that shows the housing market growing in 2024. Those metrics, specifically the pace of new listings and new sales contracts, slowed this week. Our immediate sales metric of homes that get offers within a couple days of listing also slowed.
New listings and new contracts both still show a bit of improvement over 2023, but the growth rates have slid back down. Two things happened last week that may have contributed: mortgage rates have risen again, back up to 6.9%, and the country was also in a deep freeze. That could delay a few listings and a few offers. Or maybe both of those things together cause the market to tap the breaks. Either could reverse any moment or could turn for the worse.
It’s always dangerous to blame the weather for any economic slowdown, but a quick look at the state level data shows that in general the coastal real estate market continued the trends of recent weeks, but much of the Midwest for example did not. California escaped the deep freeze last week and the housing market seems to have stayed on the recent pattern with new listings growth and continued sales growth. The state of California had 20% more contracts started last week than the same week a year ago.
So the momentum slowed a bit this week. If this persists, then my optimism for continued market recovery will have to change.
Inventory:
- Available inventory of unsold single family homes rose just a hair to 506,000.
- That’s 7% more homes on the market than last year at this time.
- Inventory has been growing vs last year, but that pace slowed this week.
New Listings:
- 54,000 new listings this week. 10,000 of those are in contract already.
- That’s just 2% more new listings this week than last year.
- Inventory growth stalled because new listings growth stalled. I’m hoping that’s just a weather-related blip. Worth keeping an eye on.
Home Sales Pending:
- The growth pace of home sales slowed this week too.
- At 261,000, there are 5% more single family home sales in the contract pending stage than last year at this time.
- There were just 1.4% more new contracts started compared to last year. 50,000 new pendings.
- We’ve been on a much stronger growth pace than that. Fingers crossed that it doesn’t tip negative again.
- Notably the coastal real estate markets seem to have performed better this week. California, which escaped the deep freeze weather, had 20% more new contracts started than the same week in 2023.
Home Prices:
- Home prices are less volatile. At $420,000 the median price of single-family homes is unchanged from last week and up a few percent over 2023.
- The price of the newly listed cohort is $399,000 right now, which is more than 5% above last year.
- It sure seems like home prices are on their way to a new all time high this summer.
Price Reductions:
- The current rate of price reductions tells us that there are sufficient buyers for the current inventory, at current prices, and current mortgage rates.
- Just 31.4% of the active market has felt compelled to take a price cut from the original list price. That’s 80bp fewer than last week and is right in the normal range.
Mike Simonsen is the president and founder of Altos Research.
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