New listings continue to trend down as rate lock-in and affordability concerns keep homeowners stuck in their current living situation.
HouseCanary’s latest Market Pulse report found that net new listings fell by double digits for the tenth straight month in February.
The report, which analyzed twenty-two metrics pulled from listing information between February 2022 and February 2023, found that 157,967 net new listings went up last month, down 43.6% YOY.
Properties that went under contract also fell, totaling only 247,294, a 17% decrease YOY.
New listings drove net volume down, falling 31.7%, combined with a 72.6% rise in removals.
Median days on the market were up 48.3% YOY to 43 days. However, days on the market fell month-over-month by nearly 19%, down from 53 days in January.
“Although the rate hike slowdown from the Federal Reserve in January helped bolster housing market activity, these early signs of a potential rebound were halted in February,” Jeremy Sicklick, Co-Founder and Chief Executive Officer of HouseCanary, said.
Homebuyer demand had shown signs of life in January, increasing slowly but surely each week.
But rates reversed course in February and cautious buyers turned back as well. Fannie Mae predicted that 2023’s “surprisingly strong” start wouldn’t last, ending with a modest recession in Q2 2023.
Homeowner tenure has risen for the last several decades, adding to stock shortages. More than a third of baby boomers have stayed in the same home for more than 33 years. As a result, builders have seen their orders increase even as the market corrects.
Utah announced this week that it has set aside $50 million in funds to help first-time homebuyers secure a house, but only if they buy new construction.
Sicklick anticipates that 2023 will bring about a more balanced market for buyers.
“While higher interest rates continue to slow market activity, we believe that the market environment is still headed towards a buyer’s market, and expect that more normalized supply-demand dynamics and pricing could be in play by the end of 2023,” he said.
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