Both listings and sales improved in December, suggesting the impact of cooling rates may finally be encouraging movement in the market.
That’s according to HouseCanary’s December Market Pulse Report, which found new listings up 5% YOY last month.
Though stock remains historically low and many buyers are still priced out of the market, the data may reflect the beginning of a market reset for 2024.
“The slight increase in December listings indicates the impact of lower mortgage rates is beginning to trickle down into the market which comes as an optimistic sign as we head into the new year,” said Jeremy Sicklick, HouseCanary Co-Founder and CEO. “With that said, any market turns are likely to be slow.”
Sicklick pointed to mortgage rate lock-in as a major roadblock for a turnaround in the new year. New existing home listings are necessary to really rev up the market, but homeowners are unlikely to sell en masse this year.
This is especially true when the cost of buying a home is high. Competition for the few affordable homes for sale has forced prices to soar. The median price of all single-family listings is up 3.1% YOY, while the median price of closed listings is up 5.6%.
Inventory improvement and rates declining further should tempt sellers back, easing competition and stalling price appreciation. But many experts don’t expect serious changes anytime soon.
“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” Rick Sharga, founder and CEO of CJ Patrick Company, told Forbes.
Still, rate cuts from the Central Bank will help ease the pressure on both buyers and sellers this year. At the very least, buyers who lock in 6% or lower rates in 2024 will benefit from improved affordability.
Looking month-over-month, price appreciation is gradually slowing as well. Redfin recently reported that the median American mortgage payment was $2,361 in December, down 14% from October’s all-time high.
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