The inventory crunch that has dogged the housing market and driven up home prices continues to do so, but at least one company is reporting that favorable selling conditions are finally coaxing sellers back into the fray.
According to Redfin’s housing market data, the number of homes newly listed for sale surpassed 2019 levels for the first time since the start of the year. For the four-week period ending on July 4, new listings of for-sale homes were up 3% from the same period in 2019 and 4% from the same period one year prior.
Active listings (the number of homes listed for sale at any point during the period) are still down 32% from the same period in 2020, although that marks the smallest decrease since the four-week period ending on Feb. 7. Active listings have risen 8% since their 2021 low, seen during the four-week period ending March 7.
Despite the long-awaited growth in for-sale supply, Redfin also reported that homebuying demand, while still torrid, has slipped some, with buyers growing weary of difficult purchasing conditions. The seasonally adjusted Redfin Homebuyer Demand Index, which tracks requests for home tours and other services from Redfin agents, dropped 1.2% during the week ending July 4, and mortgage purchase applications similarly decreased 1% week over week during the week ending July 2.
“Many buyers have backed away from the housing market and are waiting until more and better homes are listed,” said Redfin chief economist Daryl Fairweather. “Buyers don’t have the same sense of urgency that they did at the beginning of the year. They aren’t racing to buy before prices increase, because asking prices have already increased and stabilized. And they aren’t racing to buy before mortgage rates go up, because rates have dropped back below 3% and are likely to stay low.
“With more new listings starting to come on the market, buyers who threw in the towel may want to look again because the market is tilting more in their favor.”