Buyers now have more supply to choose at heights not seen since June 2020—if they can stomach the ever-rising mortgage rates. So says Redfin, who’s analytics team is out with the latest market recap.
According to the data, there were 2.9 months of home supply during the four weeks ending September 11, up from one month from a year ago and the highest level since June 2020. Months of supply measures how long it would take for the current home supply to be bought up at the current rate of consumption.
Historically, less than four months of supply is considered a seller’s market, while anything above six months of supply is a buyer’s market. Redfin notes that at the height of the pandemic, we were down to 1.8 months of supply.
“Homebuyers have more power than they’ve had since the ‘before times,’” said Redfin Deputy Chief Economist Taylor Marr. “Unfortunately, it’s increasingly hard for buyers to make use of their newfound power thanks to the affordability pressures of rising mortgage rates and a dearth of homes being listed for sale. A true buyers market would have more homes for sale than there are buyers, with a wide variety of homes for sale by style, price, and location so when a buyer finds the home that matches their preferences they face little competition and can offer under asking price with healthy inspection and financing contingencies in place. Today’s average buyer is paying less than the list price, but they continue to struggle to find a home that meets their criteria and budget.”
What is available for purchase, however, appears to be largely old stock. New listings of homes for sale were down 19 percent from a year earlier, marking the largest decline since May 2020. Active listings fell 1.7 percent from the prior four-week period.
On a year-over-year basis, active listings rose 3 percent.