February Brought More Affordable Listings To The Market

As sellers are forced to adjust to the housing market’s new normal, more affordable inventory is cropping up.

The share of available homes in the $200,000 to $350,000 price range saw the biggest growth of any price category in February, up 20.6% YOY, Realtor.com reported.

Though inventory remains tight, money-minded buyers may see an uptick in affordable homes as they shop this spring.

Inventory overall saw a boost last month, with the number of homes actively for sale on a typical day up 14.8% from last year.

This is the fourth straight month of annual inventory growth.

“The first couple of months of 2024 have proven to be positive for inventory levels, as the number of homes actively for sale was at its highest level since 2020,” said Danielle Hale, Chief Economist of Realtor.com.

“While the country is still well below pre-pandemic levels, the South is leading the charge, moving faster than other parts of the country.”

The explosion of mid-priced homes was largely concentrated in the South, as that region dominated with sheer volume of inventory: Southern metros accounted for more than half of all available inventory in the U.S. last month.

While most places continue to see inventory levels close to 40% below their pandemic averages, San Antonio (+26.6%), Austin (+10.8%), and Dallas (+2.2%) actually clocked more available inventory than in 2017-2019.

Meanwhile, Orlando (+38.5%), Miami (37.4%), and Tampa (36.3%) experienced the most inventory growth of any price point.

Both buyers and sellers are sensitive to rate changes, making February an awkward month for activity. Rates began climbing from their average in the mid-6s at the beginning of the month to their current place near 7%. But Realtor.com says despite everything, some sellers are just ready to get a move on.

Concessions are making a comeback as they try to tempt nervous buyers who hope both rates and home prices will both slip.

“I’m telling buyers who can afford it to look now while they have more breathing room and less competition. They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%,” Brynn Rea, a Redfin agent in Spokane, WA, commented.