Active listings of homes for sale increased in January to the highest level since early in the pandemic, Redfin reports.
They climbed 0.3% month-over-month on a seasonally adjusted basis in January and 12.9% year-over-year.
In addition, new listings are now at the highest level since July 2022, increasing 1.9% month over month and 4.7% year over year.
But that doesn’t mean buyers are biting: The typical home that sold in January sat on the market for 56 days—the longest of any January since 2020, Redfin says.
That’s because home affordability is the worst it’s been in decades: The median home sale price increased 4.1% from a year earlier to $418,581. That’s 45% higher than January 2020.
Ultimately, more inventory will need to hit the market before home prices begin to decrease – and even then, they probably won’t fall by much.
“I’m seeing a lot more inventory hit the market than I have in past years, but it’s not nearly enough,” says Charles Wheeler, a Redfin Premier real estate agent in San Diego. “Economic fears have been top of mind for people. I have sellers saying, ‘I think we’re at the top of the market—I’m ready to cash out and put my money into another investment.’ Buyers should know that they have a bit more negotiating power because there are more homes hitting the market. Sellers should know that since buyers have more negotiating power, they should make sure their home is polished and competitively priced if they want to sell it quickly.”
As per Redfin’s data, pending home sales in January fell to the lowest level on record aside from the start of the pandemic, dropping 4.2% month over month—the largest decline on a seasonally adjusted basis since August 2023—and 6.3% year over year.
As a result of the current conditions, deals are falling through. Home purchases were canceled at the highest January rate in records dating back to 2017. Roughly 41,000 home-purchase agreements were canceled, equal to 14.3% of homes that went under contract last month. That’s up from 13.4% a year earlier.
“On a national scale, we’re seeing an increase in people selling homes and decrease in people buying homes, bringing supply and demand closer to equilibrium,” says Elijah de la Campa, senior economist for Redfin, in a statement. “But the national snapshot masks a lot of regional variation. For example, pending sales are rising from a year ago in expensive coastal markets like San Jose and Seattle, and posting double-digit declines in pandemic boomtowns like Miami and Austin. In Newark, active listings are near an all-time low, but in San Antonio, they’re near a record high.”
Photo: Scott Webb