New data from Redfin suggests a housing inventory rebound as sellers finally adjust to the new norm of heightened mortgage rates, though thus far, listings haven’t recovered enough to encourage a meaningful price shift.
There were 548,285 new listings (seasonally adjusted) in February, the highest level since September 2022, per Redfin data. Moreover, at 3.8%, it’s the biggest month-over-month increase in six months, and at 14.8%, it’s the biggest year-over-year jump since May 2021.
Active listings, meanwhile, were up 0.8% from January to 1.60 million units. That’s still down 0.1% from February 2023, but still the highest level of active listings in a year. And the meager annual drop represents the smallest yearly decrease in months, Redfin reported.
Impacts from the longstanding lock-in effect caused by the high mortgage rate environment appear to finally be cooling, according to Seattle Redfin agent David Palmer.
“The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it’s better than it was last year. It’s coming back,” said Palmer. “Sellers who were on the fence in 2023 are now listing. They’re more used to elevated rates now. There still aren’t enough listings to quench pent-up buyer demand, but it’s getting better.”
Unfortunately for homebuying hopefuls, prices haven’t yet moderated in reaction to the inventory increase. Median home prices, per Redfin’s data, were at $412,778, up 6.6% annually. That’s the largest year-to-year surge since September 2022.
“If you price your home reasonably, buyers will show up. If you don’t, buyers will wait for you to drop the price,” Palmer said. “I recently listed an estate sale fixer upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency.”
“Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale,” said Chen Zhao, economics research lead at Redfin. “Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated.”
