As mortgage rates have stabilized below 7%, new resale listings have increased. According to Redfin, listings posted a 13% year-over-year increase during the four weeks ending March 3, the largest increase in nearly three years.
As a result, the total number of homes for sale has increased 1.7% relative to a year ago. February marked the first time in eight months the number of homes for sale increased on an annual basis.
“There have been two major obstacles for home buyers over the last year: low inventory and high housing costs,” Redfin economic research lead Chen Zhao says. “Now the first barrier is starting to come down as more supply comes on the market.”
While prices remain elevated, asking prices of new listings posted their smallest increase in two months, according to Redfin. Additionally, 5.5% of home sellers dropped their asking price, the highest share for any February since 2015.
Despite some positive developments for pricing, the median monthly housing payment remains just $23 shy of its all-time high at $2,694. Median sales prices increased 5.3% to $368,588 in February, and median asking prices increased 5.1% to $399,223. However, Redfin projects final sales prices should begin declining “soon” as price growth for new listings loses some momentum.
“Housing costs are still high, but they’re likely to come down a bit as mortgage rates gradually decline through the year and price growth loses some steam,” Zhao says. “Buyers who can afford today’s mortgage rates may have better luck finding a home now than they have in the past several months, and they also may be less likely to face competition because inventory is improving.”
On a metro level, Newark, New Jersey; Montgomery County, Pennsylvania; Anaheim, California; Fort Lauderdale, Florida; and New Brunswick, New Jersey, reported the largest year-over-year median sales price increases. San Antonio was the lone area among the 50 most populous metros to report a year-over-year price decline last month, according to Redfin.
