On an annual basis, the supply of homes for sale in February rose at a record annual pace for the sixth consecutive month—now up 87.8% year-over-year—further signaling a rebalancing of the real estate market according to Realtor.com’s Monthly Housing Trends Report.
But, despite the increase in inventory home prices have not fallen; prices rose at a rate of 7.8% from last year.
So, what does this mean for buyers and sellers? As the current favors neither any party, both sides will have to make compromises in order to complete a deal. Fluctuating mortgage rates are another which is increasing the cost of buying a home.
"The number of homes for sale on the market is up significantly from a year ago, even though fewer homeowners have listed their home for sale in recent months. High home prices and mortgage rates continue to cut into buyer interest and homes are taking more than three weeks longer to sell than last year," said Danielle Hale, Chief Economist for Realtor.com. "With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring."
"For many, shopping for a new home often begins or picks up as we head into the warmer months, which is right around the corner," said Clare Trapasso, executive news editor at Realtor.com. "Potential buyers looking to take advantage of more homes to choose from and a less competitive pace also have more negotiating power than they did a year ago. So, if a home has been on the market a while without receiving any offers, they may want the seller to contribute to their closing costs, make expensive repairs, or even buy down their mortgage rate."
- In other data as highlighted by Realtor.com:
- The median listing price in February increased 7.8% year-over-year to $415,000.
- Active listings have jumped 67.8%
- New listings were down 15.9%
- The median day a home is on the market increased 23 days to a total of 67 days.
- The share of active listings with price reductions rose 7.6% year-over-year.
Click here to see the research in its entirety, including breakdowns for major metropolitan areas.