Supply Jumps 15 Percent Year-Over-Year

Good news and not-so-good news out from Redfin this morning. According to its latest market update, for the week ending December 4, home supply has jumped 15 percent year-over-year, the biggest uptick on record.

However, new listings declined by more than 20 percent as homes sit on the market longer.

There’s also evidence of a slowing market as the typical home that sold was on the market for 37 days, up from a record low of 17 days in June and up from 28 days a year earlier. That marks the biggest year-over-year slowdown on record. 

Just 30 percent of homes sold within two weeks, the lowest share since January 2020.

“This week has been relatively calm and quiet as we approach the end of one of the most volatile years in housing history,” said Redfin Deputy Chief Economist Taylor Marr. “But it’s not over yet. Next Tuesday’s inflation report is the 500-pound gorilla in the room, and the Fed’s press conference the next day will bring us much more clarity on how soon and how quickly we can expect mortgage rates to come down in the new year. Since we expect only a small decline in prices next year, mortgage rates will dictate housing affordability, and as a result, demand and sales, in 2023. If rates continue declining, more buyers may wade back into the market, as they’ll have lower monthly payments.” 

Turning to prices, home-sale prices fell from a year earlier in 11 of the 50 most populous U.S. metros—six of which are in California . Prices fell 7.8 percent year over year in San Francisco, 3.6 percent in San Jose, 2.2 percent in Los Angeles, 1.2 percent in Sacramento and less than 1 percent in Oakland and Anaheim.