For the second week in a row available inventory of unsold rose week-over-week, according to the weekly report from Altos Research.
- Available inventory of unsold single family homes rose this week to 557,000, this is up 0.9% from last week and is up 28.7% compared to the same time last year.
- Despite two weeks of increases inventory is still 1.9% lower when compared to 2020 and is down 42.2% from 2019 when inventory was 963k.
Why The Rise? Mike Simonsen, CEO of Altos, said the rising inventory has more to do with buyers than sellers. “Looks like buyer pullback rather than seller freak-out because new unsold listings are ticking up just slightly. If sellers were panicking, new listings would be higher than previous years in September, like May/June when sellers were hurrying to list.“
Forecast. Simonsen believes inventory levels will continue to rise till mid-October and then starts the holiday rest.
Prices. The median home price for single-family homes in the US ticked down slightly to $439,000, exactly as you’d expect for September with a majority of markets looking like normal seasonality. However, Simonsen notes that “in the boomiest markets, prices are adjusting down more rapidly.”
- Price reductions seem to be moving in tandem with rates. As rates rose last week so did price cuts. 41.2% of the single family homes on the market have had a price cut, this is up from 40.6% last week.
BOTTOM LINE: As long as rates stay at 14 year highs fewer wannabe homeowners are going to be able to buy which will reduce the sales rate and therefore raise inventory levels.