Home price appreciation and stock shortages are likely to continue through the first few months of 2022, as December saw price growth pick back up heading into the new year, a Realtor.com report shows.
Though seller sentiment is positive, new listings are shrinking, squeezing the already competitive market. The number of homes actively for sale in January dropped 28.4% year-over-year (YOY), or 163,000 homes. Newly listed homes fell by 9.1% YOY and were 16.8% lower from typical 2017-2020 levels.
The January national median listing price for active listings was $375,000, a 10.3% increase YOY and up 25% from January 2020. The median listing price for a typical single-family home increased 18.6% YOY.
The report notes that though high home prices usually favor selling conditions, there are so few homes for sale that owners who might want to sell can’t find another home to move into.
“I don’t expect this to change in the next few months as home builders can’t build houses fast enough to help the supply issue,” Gregory Heym, chief economist at Brown Harris Stevens, told MarketWatch.
Nicole Bachaud, a Zillow economist, added that interest rate hikes and accelerating appreciation will price some buyers out of the market, eventually leading to some moderation. “We’re seeing monthly growth accelerate earlier in the year than normal, but we don’t expect they’ll rise quite as much as they did in 2021,” she said.
The typical home spent 61 days on the market in January, down 10 days YOY and almost a full month from typical 2017-2020 timing.
The total number of unsold homes on the market nationwide dropped 17.9% YOY, up from December’s 16.1% decline. But the annual rate of decline for new listings has improved in January, a sign of the conditions slowly but surely getting better.
While most metros saw decreases in listings, four metros saw increases from the same time last year: Cleveland (+7.6%), Orlando (+2.3%), Indianapolis (+1.6%), and Houston (+0.9%).