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.
Advertisement
Related Stories
Sales
What the NAR Commissions Settlement Means for Home Builders
The legal settlement will improve transparency during the home sales process, mitigate predatory practices, and help preserve profitability for home builders
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Sustainability
Mention of Eco-Friendly Home Features Is on the Rise in Sales Listings
Home listing descriptions using eco-friendly terms have been rising over the past five years in line with growing consumer interest in the environment and energy efficiency