Realtor.com: New Trends Emerge (Nerd Alert!)

Summary

This video delves into the US housing market's current dynamics, highlighting a 0.9% decrease in asking prices over the past year and a 34.6% rise in housing inventory. It discusses the implications of increased inventory and the slowing sales, which contribute to a softer housing market. The video also touches on the 32-week streak of price reductions and the impact of higher interest rates on new listings. It concludes by noting the transition towards a buyer's market, with regional variations in inventory levels.

Takeaways

• 🏠 Asking prices have been relatively flat or down for 14 consecutive weeks, indicating a softening in the U.S. housing market.
• 📈 Housing inventory has increased by 34.6% year-over-year, providing more options and negotiating power for buyers.
• 🔍 Inventory levels have been higher than the previous year for 43 consecutive weeks, suggesting a shift towards a buyer's market.
• 📉 New listings have seen a slowdown in growth, with an increase of less than 10% year-over-year since May, contributing to stagnant inventory growth.
• 📊 The year-over-year growth rate of inventory has been stagnant at around 35-38% for nearly four months, indicating a potential plateau in the market.
• 📉 The number of price reductions has increased by 31.9% year-over-year, with more sellers adjusting their asking prices to attract buyers.
• ⏳ Houses are taking longer to sell, with an average of six days longer compared to the previous year, contributing to higher inventory levels.
• 📉 The share of price reductions is at 39%, higher than last year but slightly lower than the peak in 2022, showing a continued trend of price adjustments.
• 🌐 Regional differences are significant, with some states like California and the Northeast experiencing lower inventory compared to 2019, while others like Texas, Idaho, Florida, and Tennessee see increases.
• 🏡 The dichotomy between new home construction sales and the resale market is evident, with new home sales increasing while the resale market hits a record low.

Q & A

What is the current trend in asking prices for US housing market?

Asking prices have been relatively flat or down for 14 consecutive weeks compared to the previous year due to higher inventory and lower home sales.

How has the housing inventory in the US changed year-over-year?

Housing inventory has increased by 34.6% compared to the same time frame in 2023, marking 43 consecutive weeks of higher inventory than the previous year.

What is the significance of the increase in housing inventory?

The increase in inventory is good news for home buyers as it provides more options and negotiating power, while sellers have to compete more due to the higher number of homes for sale.

How has the growth rate of inventory been trending recently?

The growth rate of inventory has been stagnant for nearly four months, fluctuating around 35 to 38% year-over-year gains.

What factors are contributing to the stagnation of inventory growth?

The stagnation is due to a slowdown in the number of new listings or new supply in the market, with new listings only increasing by single digits, less than 10%, since early May.

How does the current housing market compare to pre-pandemic levels?

Although there are 38% more homes for sale compared to last year, the market still has about 26% fewer houses for sale compared to the same time frame in 2019.

What is the current average time for a house to sell in the US?

Houses are taking six days longer to sell compared to 12 months ago, marking the 17th consecutive week of increased time on the market.

How has the number of price reductions changed year-over-year?

The number of price reductions has increased by 31.9% year-over-year, with more price drops than last year for 32 consecutive weeks, although the increase is the smallest since the beginning of March.

What is the current share of price drops in the housing market?

The share of price drops is at 39%, meaning nearly 4 out of 10 homes for sale have reduced their asking price, which is higher than last year but slightly lower than the peak in 2022.

How does the current housing market outlook compare to 2022?

Home price growth is expected to soften due to factors like flat or decreasing asking prices, higher inventory levels, seasonality effects, and sluggish home sales rates, unlike the sharp correction seen in 2022.

Outlines

00:00

🏠 US Housing Market Dynamics

The video discusses recent trends in the US housing market, focusing on asking prices, housing inventory, days in the market, and price reductions. It highlights a 0.9% decrease in asking prices compared to the same period last year, indicating a plateau or slight decline in home prices over 14 consecutive weeks. The presenter attributes this to higher inventory and lower sales, suggesting that many are either priced out or waiting for more affordable options. Inventory levels have seen a significant increase of 34.6% year-over-year, offering buyers more choices and negotiation power. The presenter also notes a stagnation in year-over-year growth rates of inventory for several months, suggesting a potential softening in home price growth.

05:03

📈 Inventory and Price Trends

This segment delves deeper into inventory levels, noting a 37% increase from the same period in 2022, which is less than the 93% increase seen in 2022. The presenter expects a softer home price correction due to this slower growth in inventory. They also discuss the impact of new listings, which have been fluctuating but generally showing less than a 10% increase year-over-year since May. The video points out that houses are taking longer to sell, contributing to increased inventory, and that the number of price drops has risen by 31.9% year-over-year, although this is the smallest increase since March, indicating a potential stabilization in the market.

10:04

📉 Deceleration in Housing Market

The third paragraph emphasizes the deceleration in the housing market, with a focus on the share of price drops and inventory levels. It notes that while there's an increase in the number of homes for sale and price drops, these figures are not as high as in previous years. The presenter shares that the share of price reductions has decreased slightly from the previous year but is still significantly higher than pre-pandemic levels. They also mention that despite a 35% increase in homes for sale, the market is still below 2019 levels, suggesting a complex and varied market situation.

15:04

🔍 Housing Market Outlook

The final paragraph provides an outlook for the housing market, noting that asking prices have been flat or down, inventory has been increasing, and homes are staying on the market longer. It points out that the share of price reductions, while high, is not at a five-year high as it was in 2022. The presenter also discusses the dichotomy between new home construction sales, which increased, and the resale market, which fell to a record low. They conclude by stating that while the market is moving towards a buyer's market, significant regional differences exist, and the overall market has not yet fully transitioned.

Keywords

💡Asking Prices

Asking prices refer to the initial listed prices of homes for sale as set by the sellers. In the video, asking prices are highlighted as having decreased by 0.9% compared to the same time frame one year ago, indicating a softening in the housing market. The video discusses how this decrease in asking prices, observed over 14 consecutive weeks, is a key indicator of the market trend, reflecting a shift from sellers' to buyers' market dynamics.

💡Housing Inventory

Housing inventory denotes the number of homes available for sale at a given time. The video script mentions a 34.6% increase in housing inventory compared to the same period in 2023, suggesting a rise in the supply of homes on the market. This increase in inventory is beneficial for buyers as it offers more choices and potentially stronger negotiating positions, as sellers face more competition.

💡Days in the Market

Days in the market is a measure of how long it takes for a property to sell once it is listed. The video indicates that homes are taking six days longer to sell compared to 12 months prior, marking 17 consecutive weeks of this trend. This prolonged period reflects a slower housing market and contributes to the growing inventory as homes do not sell as quickly.

💡Price Reductions

Price reductions refer to instances where sellers lower the asking price of their homes in an attempt to attract buyers or to reflect market conditions. The video notes a 31.9% year-over-year increase in the number of price reductions, indicating that sellers are becoming more flexible with their pricing to facilitate sales in a cooling market.

💡New Listings

New listings are homes that have recently been added to the market for sale. The video discusses a 5.5% year-over-year increase in new listings, which is a positive sign for buyers as it contributes to the overall housing inventory. However, the script also points out that new listings have been growing at a slower pace, which could be a factor in the stagnation of inventory growth.

💡Seasonality Effects

Seasonality effects are fluctuations in market activity due to seasonal changes. The video suggests that the housing market tends to cool off in the winter months, which could influence the slowing sales and the increase in housing inventory. This seasonal pattern is a normal part of the housing market cycle and is considered when analyzing market trends.

💡Mortgage Rates

Mortgage rates are the interest rates on loans used to purchase homes. The video implies that current mortgage rates are a significant factor influencing the housing market, with higher rates potentially pricing out buyers or making homeowners reluctant to sell, thus affecting the supply and demand dynamics in the market.

💡Pending Home Sales

Pending home sales refer to contracts that have been signed but have not yet closed. The video cites a record low level of pending home sales, indicating a significant drop in buyer interest and a potential further cooling of the market. This metric is a leading indicator of future sales and can signal upcoming trends in the housing market.

💡Housing Affordability

Housing affordability is the ability of potential homebuyers to purchase homes relative to their income and the cost of the homes. The video suggests that affordability has improved but remains a significant issue due to high home prices. This is a critical factor affecting the housing market, as less affordable housing can lead to decreased demand and slower sales.

💡Buyer's Market

A buyer's market is a condition where property supply exceeds demand, giving buyers an advantage in negotiations and potentially lower prices. The video indicates that the market is moving towards a buyer's market, as evidenced by factors such as increased inventory, longer days on the market, and more common price reductions.

Highlights

Discussing recent dynamics in the US housing market, including asking prices, housing inventory, days in the market, and price reductions.

Asking prices have decreased by 0.9% compared to the same time frame one year ago, indicating 14 consecutive weeks of flat or down pricing.

Inventory levels have increased by 34.6% year-over-year, offering more options and negotiating power for home buyers.

Inventory growth has been stagnant for nearly four months, with year-over-year gains hovering around 35-38%.

Housing inventory rose by 37% from January through August compared to the same period in 2022, a significant increase but less than the 93% increase seen in 2022.

New listings have been increasing by single digits, less than 10%, since May, contributing to the stagnation in inventory growth.

Houses are taking longer to sell, with an average of six days longer compared to 12 months ago, impacting the total amount of houses available for sale.

The number of price drops has increased by 31.9% year-over-year, but the growth rate has been the smallest since March.

The share of price drops is at 39%, higher than last year but slightly lower than the 40% seen in 2022.

Inventory levels are at a 4-year high, but still significantly below pre-COVID levels.

The average 30-year fixed mortgage rate is near a 1.5-year low, improving housing affordability but still a concern due to high home prices.

Mortgage purchase applications have decreased by 4%, the smallest year-over-year decrease since November 2019.

Pending home sales for existing houses fell to a new all-time record low in July, contrasting with a 6% increase in new home construction sales.

The housing market is moving towards a buyer's market, but significant differences exist between regions, with some seeing inventory levels down from 2019 and others piling up.

The video concludes with a call to action for viewers to like and subscribe for more housing market analysis.

Transcripts

some very interesting Dynamics are

happening right now to the US housing

market in today's video I'm going to

talk about that because we're going to

talk about asking prices housing

inventory days in the market and also

price reductions as well also stay tuned

towards the end of this video I'm going

to talk about what's happened overall uh

to our hey Market over the past couple

weeks as well uh this is one of my

favorite videos I make for you guys each

and every week regarding my own analysis

of rcom's latest data and they actually

just announced their lat report just

posted on September 5th and I'll leave a

link to this article in my video

description but I didn't did not even

read it instead go to

realtor.com

researchdata click on weekly inventory

and then click on that link right there

and it takes you more or less to this

information so let's go ahead and Dive

Right In the most recent stats we have

from them is for the week ended August

31st they look at year VI your changes

for asking prices housing inventory or

the amount of houses for sale new

listings people listing their houses for

sale and also days in the market and the

number of price reductions uh Nationwide

so let's talk about asking prices first

that decreased by .9% compared to same

time frame one year ago therefore asking

prices have been relatively flat or down

compared to the previous year for now

for 14

consecutive weeks we're no longer seeing

strong home price growth uh because

inventory is much higher right now than

it was one year ago on top of that home

sales are also relatively low as well

therefore home prices and or rates would

likely have to decrease further nor see

a significant rise in home sales uh

Nationwide I'm saying this because I

believe a lot of people are priced out

of buying a house or they're just

waiting on the sidelines for it to

become more affordable to buy a house so

because of these factors rise inventory

and a lack of sales this is all

contributing to the softness in home

prices uh in the United States okay

let's talk about inventory levels or the

amount of houses for sale uh in the

United States that increased by

34.6% compared to scene time frame in

2023 so inventory has been higher

compared to the previous year for 43

consecutive weeks going all the way back

until mid November last year that of

course is good news for home buyers if

you want to buy a house it's great to

see we have more options right uh giving

you more negotiating power because you

have more houses for sale which means

that home sellers have to compete

against each other more so than when

inventory is down greatly and of course

the markets in which um buyers have more

negotiating power than um not uh those

are areas in which inventory is um

higher today than it was back in

2019 every Market is different however I

would be doing you a disservice here by

saying that um we're seeing you know

skyrocketing inventory levels because

for example the year- ofe growth rate

has been stagnant for nearly four months

has been important to you guys for about

four months now the year your gains have

been paid at around 35 to about 38%

everever since miday this year I want to

share my key takeaways regarding this so

inventory growth has been stagnant from

a low amount of houses being listed for

sale sale so for example since early May

new listings have been up um from a year

ago by single digits less than 10% uh

for the most part uh prior to that it

was on the rise by more than 10% for two

consecutive months and I'll share that

here in a little bit regarding a lack of

new Supply here in the market let's

first talk about inventory levels

according to my own analysis of alos

research.com latest data I also have an

update regarding inventory from

realtor.com because they just posted

August's data as well I'll share how

that compares to years past uh going

back to 2016 so right now at least for

the week ended um August 30th this year

there's 74,000 homes for sale according

to Altos one year ago approximately

510,000 so we have approximately 195,000

more Home St sale compared to year ago

that's an increase of

38% um from 12 months ago and that has

been paid at around 30% ever since May

this year so in other words inventory or

the growth rate has been relatively flat

ever since then also there's

approximately

205,000 more homes for sale compared to

the start this year so Year date we're

up by about

25,000 compare that to the same time

frame last year at this time it was up

by only 8% so in other words Supply is

growing much faster this year than it

was last year now here's a big

difference this is something I actually

just added here uh because uh real.com

just announced uh August's data so

inventory levels are also Rising much

faster compared to preo so for example

housing inventory rose on average by 16%

from January through August in 2017

through

2019 that's Based on data from r.com

compare that to a gain of around

37% so far this year January through

August but the increase this year is

still much less than

2022 so for example from January through

August of 2022 inventory basically

skyrocketed up by

93% whereas this year we're up by 37%

during the same time frame this my

friends is why I do not expect to see a

sharp correction in home prices like we

saw in

2022 but home price growth should soften

though due to four main reasons number

one the decrease of asking prices of

houses being listed for sale as I Shar

with you guys for about 14 consecutive

weeks um asking prices have been

relatively flat or down year-over-year

number two of course we have more houses

for sale more inventory levels number

three due to seasonality effects of our

housing market our housing market tends

to cool off in the winter months of

course and of course sluggish rate of

home sales as well and of course let's

keep an eye on this in the coming months

because of course a lock of change um

also to summarize inventory is not only

up by about 38% according to data from

alos but it's also Rising much faster

compared to preco levels however it's

not Rising nearly as fast as

2022 again looking at uh preo up by

16% this year so far we're up by

37% but 2022 we're up by whopping 93%

some very big changes over the past

several years um also even though we

have you know what 38% more homes for

sale right now compared to the scene

time frame last year we're still down by

about

26% from 2019 all right let's get back

to my nerdy analysis of real troms

latest data because as I mentioned we're

seeing you know stagnation of inventory

growth due to the fact we're seeing you

know basically stagnation of new

listings or new Supply in the market so

new listings Rose by 5. 5% uh year-over

a year that marks the second consecutive

uh week in which uh new listings are up

compared to one year ago but before that

we saw two consecutive weeks in which

new Supply were down so for example four

weeks ago we were down by .9% the week

uh before that we are at a decrease of.

2% also with the exception of a couple

weeks ever since May this year new

listings have been up by less than 10%

in Contra the increase by over 10% from

February through April so the spring

home buying season we saw a huge amount

of not a huge amount you know a

significant increase of new Supply here

in the market compared to the same time

frame in 2023 but now that's been

basically reversed uh We've basically

been seeing a low level of new Supply

here in the market ever since really may

as you can see right here new Supply H

in the market increasing by less than

10% with the exception of uh July 13th

and June 29th before that we saw Double

J gains from February 3rd through April

27th therefore the growth rate of new

Supply here in the market or new

listings has stalled causing stagnant

growth rate of housing inventory okay

let's change gears slightly here and

talk about how fast or how slow houses

are selling Nationwide last week it took

six days longer to sell house compared

to to 12 months ago this marks the 17th

consecutive week in which houses have

been taking longer to sell compared to

the previous year this is drastically

different compared to um October of 2023

through March this year when homes were

selling faster on average compared to

the year prior to that uh the impact

regarding this is that um houses are

taking longer to sell and this is

helping increase the total amount of

houses available for sale or increasing

house inventory okay changing gears

slightly again here let's talk about the

increase in the number of price drops

Nationwide that Rose by

31.9% year-over-year so the number of

price drops has been higher compared to

last year for the past 32 consecutive

weeks however even though there's more

price drops than last year the gain of

31.9% last week is the smallest

year-over-year increase since the

beginning of March this year there for

Big Picture we're seeing basically

stagnation growth of uh inventory levels

new Supply here in the market as well as

the number of price drops as well it is

worth noting of course though that we

still have what 35% more home sour sale

than last year and of course more price

drops as well now one thing I do want to

share regarding price drops though uh I

want to share some more um recent Trends

from alus research.com so for the week

of or week ended maybe it's not more

recent but a different step stats here

uh for the week ended August 30th the

share of price shops was at 39% this

means that for a very 10 homes for sale

Nationwide have reduced her asking price

that is higher than last year uh at

36% however though it's lower than very

slightly a little bit lower than uh this

time in 2022 when the share was at 40%

uh but at 39% this is way higher

compared to 21 at

27% 2020 at around uh

25% and also higher compared to preo

levels back in mid uh September 2019

when the share was at

36% of course part of the reason why

we're seeing an increase of the share of

price drops is this right here this is

inventory levels so according to alos

we're at 74,000 one year ago again

510,000 but at

74,000 this at least a 4 year high

during the same time frame in fact it's

actually a 4-year high for any month

going back to at least uh July of

2020 however though we're still way

below preco so for example in midt 2019

there was 953 th000 houses for sale now

there's only 74,000 all right moving on

I want to share a summary of today's

video because of course that was a lot

of information to cover right so number

one um asking prices have been flat or

down year Vie for the past 14

consecutive weeks this is from a

significant rise in the number of houses

for sale as well as elevated home prices

which of course is keeping many buyers

waiting for prices and or rates to

decrease number two housing inventory

Rose by about 35% last week but the

growth rate has been stagnant for nearly

4 months paid at around 35 to about 30%

uh for about 4 months in my opinion this

is from a slow down in the number of new

Supply H in the market however we still

have approximately 26% fewer houses for

sale compared to same time frame in 2019

I won't share these stats below because

this is only looking at July's numbers

and um I should have um numbers from

resic Club analytics.com um once they

post um August numbers because I'm

guessing that um a lot of these states

Washington Utah Colorado Arizona may

have more House of for sale uh this

August compared to August of 2019 we

already know that as of July uh Texas

Idaho Florida and Tennessee had more

inventory levels from July of 2019 so

I'll update that once they uh update

their numbers on their website um number

three uh we all know that we a lot of

people have rates far below current

levels right now about 78% of homeowners

who do have a loan their house have a

rate or a a mortgage rate below 5% so

that has been limiting the amount of

people listing their house for sale

given that the average 30-year fixed

rate at the time of filming this video

is in the low 6% range that of course is

keeping hous inventory well below 2019

levels uh new Supply in the market has

been rising by less than 10% since May

which of course is limiting the growth

rate of inventory I do not expect to see

a giant surge of people listing your

house for sale uh really due to two main

reasons and that is because of um you

know the elevated rates we have right

now but of course also due to

seasonality maybe three reasons um but

also because we're not seeing a lot of

force selling right now because

unemployment is still remaining very low

historically speaking however if

unemployment starts spiking though

people start losing their jobs of course

that will cause more people uh who are

be forced to sell their houses um as

well number four the share of price

reductions is no longer a fiveyear high

as I explained with you guys uh it's

actually a little bit below 2022 levels

but much higher compared to

2019 um also in a span of 6 months in

2022 the share of price shop skyrocketed

from 17% to 40% more than doubling in

the span of 6 months compared that to

this year the trough was at 30% now it

has increased to 39% so a small gain of

around 9% points uh compared to more

than doubling in 2022 number five last

week houses on average took six days

longer to sell from last year also

houses have been uh taking longer to

sell uh for the past 17 consecutive

weeks of course before that houses were

selling faster compared to the same time

frame in

2023 as houses have been taking longer

sell

this of course is contributing to the

rise of inventory but wait there's more

number one average 30-year fixed rates

are sitting very close to a 1 and a

halfe low housing affordability has

improved but it's still a big issue uh

due to near record high home prices uh

this can be seen by the record level of

low level I should say of pending home

sales this July that was posted from the

National Association rers they recorded

or posted we have a record low level of

contracts being signed between buyers

and sellers and our data by the way goes

back through 2001 I believe so the

amount of contracts being signed between

buyers and sellers is lower today than

it was back in 2008 absolutely

mind-blowing number two the most recent

stats we have showing mortgage purchase

applications those decreased by 4% uh

for the week ended August 30th that's

according to data from the MBA but based

on my own analysis of their data that's

the smallest year- ofe decrease since

the week ended November 19th of

20121 in other words that's the smallest

year decrease in nearly 3 years so big

picture the amount of people who are

submitting applications to buy houses

using loans is still at relatively low

levels it's not a you know 30-year low

it's on par with levels we saw back in

1995 but it's not the lowest levels over

the past 12 uh months but what we do see

right now is a low level of application

numbers and therefore a low level of uh

uh of difference compared to one year

ago but we're not seeing the giant

decrease in applications like we saw in

late 2022 or early

2023 where we saw a decrease of

applications in the range of 20 to about

40% now it's down by only 4% so a small

de increase of a small amount of

applications that makes sense um let's

move on uh the national associate rers

or n reported that pending home sales of

a existing houses in July uh fell to a

new all-time record low as I share with

you guys in contrast new home

construction sales a measure of

contracts being signed between Builders

and home buyers actually increased by 6%

this July the highest rate of new home

sales since May of

2023 this dichotomy of our housing

market where Builders um have an

advantage uh right now because they can

offer all these incentives a much lower

rate um also offering free Builder

upgrades uh Etc so that caused um sales

to increase in July yet the resale

Market of existing houses fell to a new

all-time record low home builders though

are still facing headwinds because they

still has a glut of houses for sale uh

so for example

the amount of new houses for sale is

basically on par right now with 2008

levels number three looking forward for

the nation as a whole asking prices are

down inventory has been increasing homes

are sitting on the market longer and

price reductions are more common now

than it was back in

2019 we are moving towards a buyer

Market but we're not there yet for the

nation as a whole plus every hous

Market's different inventory in

California and the Northeast part of uh

the United States is down greatly from

2019 in contrast inventory is piling up

in Texas Idaho Florida and Tennessee

number four the most important one

please like And subscribe I appreciate

you guys so much have an amazing day and

look forward to seeing you on the next

video

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