A recent article on Realtor.com, “The Housing Market Just ‘Burst’—in the Very Best Way Imaginable” by Margaret Heidenry (Jan 9, 2024) discusses a significant increase in the availability of real estate listings in December 2023, marking a positive shift in the housing market. This change is attributed to falling mortgage rates, impacting inventory levels and buyer behavior, though challenges in affordability and high demand persist. I’ll summarize...
Key Points
- Increase in Real Estate Listings: December 2023 saw 33,251 more real estate listings compared to the same month in the previous year, ending 17 months of declining inventory.
- New Listings Surge: Fresh listings increased by 9.1%, providing a substantial boost to the market.
- Mortgage Rate Impact: The recent decrease in 30-year fixed mortgage rates, which had previously reached a 22-year high, contributed to the inventory increase. Lower rates lessened the lock-in effect, motivating homeowners to enter the market. Of course, rates change almost daily, so keep an eye out.
- Comparison to Pre-Pandemic Levels: Despite the improvement, active inventory was still 36% below the levels typical between 2017 and 2019.
- Stable Home Prices: Median home prices were relatively stable, rising only 1.2% year-over-year from $400,000 to $410,000 in December.
- Affordability Challenges: Financing costs increased, requiring higher household income for purchasing median-priced homes. The monthly cost of financing 80% of a typical home rose by 6.1%, adding $123 to monthly expenses.
- Rapid Home Sales: Homes were selling faster, with an average of 61 days on the market in December, which is quicker than in previous years.
- Regional Variations: The South experienced the lowest listing price growth and significant inventory growth, attributed to easier building conditions and more investor activity.
Conclusion
While the housing market shows signs of revival with increased listings and more stable prices, challenges in affordability and high demand remain. The trend reflects a cautious optimism for buyers and sellers in the new year, albeit with the acknowledgment that the market has not fully returned to pre-pandemic conditions.
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