New Listings, House Prices Fall in November as Buyers Back Off
As mortgage rates fluctuate around 7% and a growing number of buyers press pause on home purchases, new listings are posting consecutive monthly declines. New listings were down 16% year-over-year in October, and that measurement fell even further last week to 20% year-over-year, the 18th week of annual declines, according to Bill McBride in the CalculatedRisk Newsletter.
Despite decreased activity from home sellers, total housing inventory is up 8.5% compared to the same week in 2020, and an above-average 6-month supply of homes is currently under construction.
This elevated level of homes under construction is due to supply chain constraints. However, there are only about two-thirds of the normal level of completed homes for sale. It is likely we will see a sharp increase in completed inventory over the next several months - and that will put pressure on new home prices.