Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from my employer New American Funding's Research/Analytics Department.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
I'll be posting the highlights here - for you data and chart geeks at the end is a link to the full report.
The Highlights -
- The median number of days for a home to change from for-sale to pending status in the U.S. fell to 17 days in February, matching last year’s tally.
- Inventory levels have declined to 2.59 homes per 1,000 people in the U.S. or just 66.3% of pre-Covid levels -using February 2020 a baseline - making it easy to see why the housing market remains hot despite the decline in transactions.
- Looking across the U.S., the vast majority of homebuyers will face housing market conditions where homes are selling faster and nearly all homebuyers will encounter a smaller selection of homes to choose from.
- For homebuyers in the Northeast and Midwest homebuyers face a double whammy of faster home sales and less inventory in all the top 100 most populous markets -except for Indianapolis which has homes selling slightly slower.
- 8 of top 10 metros that lost the most housing inventory between February 2020 and February 2024 were in the Northeast and 2 were in the Midwest. In these markets inventory per capita levels declined by -52.9% or more.
- 8 of top 10 metros that gained the most housing inventory were in the South and 2 were in the West. In these markets inventory per capita levels increased by -1.0% or more and include the only 8 markets with positive inventory growth.
- 8 of top 15 fastest selling metros were in the Midwest. In these markets homes went from for-sale to pending in under 1 week and 6 were tied for the 10th spot.
- The top 16 slowest selling metros were all in the South. In these markets homes went from for-sale to pending in 27 days or more.
- The typical U.S. homeowner has spent 11.9 years in their home, up from 6.5 years two decades ago.
As we all know by now the route cause for the accelerated speed in homes flying off the market is the mismatch between supply and demand caused by more than a decade of under-building relative to population growth (a shortage of 6.5 million single-family homes or 2.3 million if you include multi-family (per
Realtor.com), existing homeowners refusing to list their homes due to the lock-in effect (89% of people with mortgages have an interest rate below 6% (per
Redfin), and more than enough demand for housing from buyers despite just 35.9 million of the 132.5 million U.S. households (27.1%) that can afford to buy the new median priced home at $425,786 in 2023 (per
NAHB).
Those three factors have contributed to inventory levels holding at 901 million homes for-sale in the U.S. in February 2024 (the count of unique listings that were active at any time in a given month). To put things into perspective, relative to population, that puts inventory levels at just 2.59 homes per 1,000 people in the U.S. or just 66.3% of pre-Covid levels (using February 2020 a baseline) making it easy to see why the housing market remains hot despite the decline in transactions.
Analyzing housing market conditions today with respect to pre-Covid or “normal” housing market conditions by metro reveals how drastically things have changed for homebuyers entering the market this spring. Looking across the U.S., the vast majority of homebuyers will face housing market conditions where homes are selling faster and nearly all homebuyers will encounter a smaller selection of homes to choose from. For homebuyers in the Northeast and Midwest homebuyers face a double whammy of faster home sales and less inventory in all the top 100 most populous markets (except for Indianapolis which has homes selling slightly slower).
8 of top 10 metros that gained the most housing inventory were in the South and 2 were in the West. In these markets inventory per capita levels increased by -1.0% or more and include the only 8 markets with positive inventory growth, they were:
- New Orleans, LA (66.9%)
- Cape Coral, FL (41.8%)
- Austin, TX (27.7%)
- McAllen, TX (25.4%)
- Lakeland, FL (9.3%)
- Memphis, TN (7.6%)
- San Antonio, TX (1.3%)
- Ogden, UT (0.4%)
- Tampa, FL (-0.5%)
- Provo, UT (-1.0%)
These markets are worth monitoring for weakness in home price growth on a relative basis to other housing markets.
The top 16 slowest selling metros were all in the South. In these markets homes went from for-sale to pending in 27 days or more, they were:
- McAllen, TX (58 days)
- San Antonio, TX (44 days)
- New Orleans, LA (42 days)
- Austin, TX (40 days)
- Deltona, FL (40 days)
- Cape Coral, FL (38 days)
- North Port, FL (37 days)
- Miami, FL (35 days)
- Jacksonville, FL (34 days)
- Baton Rouge, LA (32 days)
- Lakeland, FL (31 days)
- Memphis, TN (31 days)
- Palm Bay, FL (29 days)
- Houston, TX (28 days)
- El Paso, TX (27 days)
- Little Rock, AR (27 days)
Homebuyers in these markets may have the luxury of being a little more patient and selective in their homebuying search.
My Thoughts -
People living in their homes longer comes from rates falling for almost a decade until the last year or so. Refinancing made it easier to stay in the home with continuous lower rates, remote working, and now people don't want to give up their rate.
That leaves the market only to first-time home buyers, death, divorce, and relocation - the move-up buying is on life support and barely above a flat-line.
A resurgence in inflation see today's CPI numbers 2X estimates will keep rates higher for longer. Like they say
"marry the house & date the rate." Things could get worse before they get better.
I was surprised to see the slowest selling metros all in the South with Texas holding 4 of the top 16 spots. Perhaps because more homes are being built in the South vs Midwest and East?
While they say these are slow-markets historically 27-58 days to close a home is not unusual pre COVID buying craziness.
Love to hear your thoughts/comments!
Have an Amazing Week & Hook 'Em!
MH
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