The recent pullback in mortgage rates is spurring more homeowners to put their homes up for sale, though the increases so far have been too modest to return the housing market’s inventory of available properties back to pre-pandemic levels.
The number of active listings, a tally of U.S. homes on the market that excludes those pending a finalized sale, climbed 4.9% to 714,176 in December from a year earlier, the biggest annual increase since June, according to data released this week by Realtor.com.
A big part of the increase was due to a 9.1% jump in new listings, or properties that made their market debut in December, which posted an annual increase for the second time after 17 months of declines.
As is typically the case, active listings declined in December from the previous month, falling 5.5%. But the drop was less than the typical decline of 6.8% to 13.2%, Realtor.com said.
While the pickup in home listings is a welcome development for prospective homebuyers, the housing market remains constrained with for-sale inventory still well below pre-pandemic levels.
Consider that active listings were down 30.9% in December compared to the same month in 2019, while new listings were down nearly 12%.
Housing economists expect that the average rate will continue to decline this year, though forecasts generally see it moving no lower than 6%.
That may not be enough to motivate many homeowners to sell, given that some two-thirds of U.S. homes have a mortgage with a rate under 4% and more than 90% have a rate below 6%.
That means the upcoming spring homebuying season is likely to favor sellers as homebuyers compete for a relatively limited number of homes for sale. (Florida Realtors)
- Andrew Oliver, M.B.E., M.B.A.
Real Estate Advisor