The dampening housing market continues to swing fundamentals in the favor of buyers, with inventory increasing by more than 50% year over year, according to Realtor.com.
The website’s December housing trends report revealed that the number of active listings for sale increased by 54.7% annually (or roughly 244,000 units) during the month, giving buyers more options as they scour the market. The number of homes for sale is growing but remains low. Compared to the typical number of active listings from 2017 to 2019 (before the COVID-19 pandemic resulted in historic distortions to the residential real estate sector), the number of active listings in December 2022 was down 38.2%.
Meanwhile, the number of total listings (including homes under contract but not yet sold, aka pending listings), was up by 6% compared to December 2021. That’s also up from November’s annual growth rate of 3%, because homes are spending more time on the market. The typical home spent 67 days on the market in December, up 11 days on a year-over-year basis, even though homes still stayed on the market for 16 fewer days than they did in the average December from 2017 to 2019. In large cities, they’re selling slightly faster, with the typical home spending 61 days on market in the country’s 50 largest metropolitan areas.
Still, the growth rate in total listings remains lower than that of active listings, because there were fewer pending sales in December 2022 than there were in the same month one year prior. Pending listings fell by 36.8% annually in December, following a similarly sized drop in November. According to Sabrina Speianu, Realtor.com’s economic data manager, this suggests that the market is beginning to stabilize at “a relatively low level of existing home sales activity,” although this could change if inflation improves and mortgage rates shrink.
Also of note, per Realtor.com’s data, is the national median list price, which fell to $400,000 in December. Median home prices are now down 11.1% from their record peak of $449,000 in June 2022. December home prices grew by 8.4% year over year, the first time that median list-price growth has sunk below a double-digit percentage in 12 months.
Conversely, the share of homes with price reductions has grown, swelling from 7.1% in December 2021 to 13.6% in the same month last year. While this share is larger than it was right before the pandemic began, it’s lower than the percentage of price-reduced homes in 2018, when 14.5% of homes had prices adjusted downward.