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Prospective homebuyers got a piece of good news during November: More people listed their homes this month than they did at the same time last year, marking the first time in well over a year that inventory has shown year-over-year improvement.
According to a report published this week by Realtor.com, 7.5 percent more homesellers listed their homes in November 2023 than in November 2022 — the first time the rate of newly listed homes has recorded an annual increase since May 2022.
“November saw the first annual growth in newly listed homes in 17 months,” Realtor.com Chief Economist Danielle Hale said in an analysis. “While many consumers still expect mortgage rates to rise over the next year, home selling sentiment has been improving, suggesting that potential sellers are adjusting plans to account for lingering high rates.”
Total inventory has also improved, with the typical day in November having 0.7 percent more homes for sale than in November 2022 and 2.7 percent more than in October 2023. The turnaround marks an end to four straight months of annual inventory decline.
The increase is also significant for how late into the fall season it is occurring. Fall is typically the slowest time of year when inventory is decreasing.
“Notably, inventory in November increased 2.4 percent above October levels, the first time inventory has increased this late in the fall season since our records commenced in 2016,” Hale wrote in the report.
While there are slightly more homes for sale than there were a year ago, prospective buyers will have to pay a great deal more for them. While the nation’s median listing price has remained relatively stable, increasing just 1 percent to $420,000 according to Realtor.com data, higher mortgage rates have increased the monthly cost of financing 80 percent of a typical home by 7.9 percent, adding $172 in costs per month for homebuyers. The typical homebuyer would have to earn roughly $118,000 per year to comfortably afford those housing payments, a $7,100 increase from a year ago.
The report theorized that buyers are slowly beginning to reenter the market because they have given up hope that rates will subside anytime soon and have gradually accepted the reality of a high-interest rates market. Some sellers expect rates will rise even higher, Hale said.
“It is possible that, compared to last year, sellers have less hope that mortgage rates will fall sufficiently enough over the next year and thus are not temporarily putting off plans to sell in order to wait,” Hale said.
Additionally, sellers who have finally entered the market after putting it off seem to be understanding of the price predicament buyers are in, and some seem to be pricing their properties accordingly, according to the report.
“Home selling sentiment has been improving, suggesting that potential sellers are adjusting plans to account for lingering high rates,” Hale said. “Meanwhile, while the share of price reductions showed more momentum than is typical this time of year, the nation’s median list price continues to remain relatively stable compared to last year.”
