As Mortgage Rates Rise, Existing-Home Sales Are Inching Toward Record Lows

After four months of consecutive declines, housing inventory has fallen to 1.14 million, roughly 900,000 active listings below the lowest level of the four-decade average between 2 million and 2.5 million, HousingWire reports. As buyer demand nosedives in the wake of rising mortgage rates, so too are home sales, but purchase application data reveals a much slower pace of declines at the close of 2022.

In the final month of the year, homes are lingering on the market for an average of 24 days compared with 18 days one year ago, but if mortgage rates stabilize in 2023, renewed demand could speed up the for-sale market and lead to a rise in listings.

The big takeaway in today’s existing home sales report is that we need to see new listing data grow in 2023 to get more home sales. Some people might believe that new listing data being negative is good for the housing market because it means inventory is stable. I believe this is the wrong way to look at the housing market. We want to see people list their homes and move when they want to. That is just a function of life; not everyone sits in the same home for 18 years like me. 

Hopefully, in 2023, when we see the traditional inventory rise, this will come with new listing data growth, and we can get the total national inventory levels back to 2019 levels, which I will be very happy to see.

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