New listings were down 17% year-over-year last week, marking the thirteenth consecutive week of yearly declines, but even as listings fall, inventory is on the rise, says Bill McBride in the CalculatedRisk Newsletter. With 5.4 months of homes under construction, McBride expects a sharp increase in completed inventory in the months ahead, and that will put pressure on new home prices.
That relief comes in the midst of a worsening affordability crisis with mortgage rates at a 20-year high and home prices up 15.8% year-over-year, a costly duo sending the monthly payment on a $500,000 house 79% higher than it was just one year ago.
There are always some people that need to sell; death, divorce, moving for employment are a few reasons. However, homeowners with a low mortgage rate will be reluctant to sell, and then buy a new home, when their monthly payment will be much higher for the new home. The sharp increase in mortgage rates is probably the key reason new listings have declined sharply year-over-year.
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