Here’s some good news for mortgage originators counting on more home purchase volume this year: The supply of homes for sale is on the upswing, according to Redfin.
On a nationwide basis, the U.S. housing market had 5 months of supply of for sale inventory at the beginning of February, which was near a six-year high, according to the national online brokerage.
Months supply refers to the length of time it would take for the for sale stock to be exhausted under the current sales pace.
The supply is up from 4.4 months a year earlier. A supply in the range of 4 to 6 months is considered a balanced market by most economists.
New listings for sale increased nearly 8% during the four weeks ending Feb. 2, the biggest jump since the end of last year, Redfin said. Buyers have “a growing pool of supply” to choose from, and on a nationwide basis the market appears to be shifting in the buyer’s favor.
The typical home is now selling for 2% less than the listing price, the biggest discount in two years, Redfin said.
More choices for buyers have yet to translate into more pending sales, however. According to Redfin, pending sales remained down about 8% year over year in January. Affordability remains a challenge, Redfin said.
“Stubbornly high home prices and mortgage rates have pushed the median monthly housing payment up to $2,784, up 8.3% year over year to just $21 shy of the all-time high,” the company said.
Some buyers are also hesitating because of extreme weather and uncertainty about federal policy, Redfin said.
