Despite Demand, U.S. Home Sellers Slow to Return to the Market
"Record-low mortgage rates are helping fuel a brisk pace of home sales later into this summer than normal, but buyers are having to compete over fewer and fewer listings," said Zillow economist Jeff Tucker. "The flow of new listings has recovered somewhat, but not fast enough to replace all the recent sales, so inventory continues to plumb new record lows. There's no single reason sellers have been slow to return, but some possibilities include reluctance to having strangers tour their home; concerns about difficulty getting their next home and an assumption that they couldn't sell for a high price right now."
Newly pending sales fell last week, but other indicators show a hot market
- Newly pending sales fell 0.9% week over week, but remain 13.8% higher than the same period a year ago.
- Homes that went under contract last week were typically on the market for 14 days. That's 11 days faster than last year.
- The share of listings with a price cut held steady at 4.2%, which is 1.3 percentage points lower than a year ago. It's remained at that share for the past four weeks.
- New for-sale listings fell 3.6% week over week and were 15.8% lower than the previous year as would-be sellers continue to largely stay out of the market. That is an improvement from past months -- new listings were down 16.5% annually in the week ending April 1, and down 24.7% in the week ending July 1.
- Total listings are down 26.9% from a year ago, and down 0.9% from a week earlier.
- The median list price in the U.S. continues to grow, now at $343,680, 6.6% higher than last year.
- During the week ending June 20, the median sale price was $266,805. That's 1.4% higher than a year prior.
- The gap between list prices and sale prices does not necessarily mean homes are selling for well under their list price. The most-expensive homes often take longer to sell than more-affordable homes, and they help push the median list price up while they linger on the market.
- Rents were chugging along at a stable pace before the coronavirus pandemic, but heavy service-sector unemployment has hit renters more severely than homeowners, impacting rental demand and slowing price growth. Boosted unemployment benefits have expired with no replacement in place for now, and that may cause a ripple effect felt by renters, landlords and those who rely on the rental industry.
- Rent prices in urban areas have slowed more than those in suburban areas, a possible signal that renters' preferred location is tilting toward the suburbs.
Boosted government unemployment aid has expired, meaning those numbers are likely to rise even further in coming months.
Redfin is reporting this week that condo sale prices in the U.S. dropped 1.4% year over year to a median of $252,000 in June 2020.
According to the National Association of Realtors, existing-home sales rebounded at a record pace in June 2020, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic.
The total number of U.S. loans now in forbearance decreased by 38 basis points from 8.18% of servicers' portfolio volume in the prior week to 7.80% as of July 12, 2020.
This represents a 2.5-percentage point increase in the overall delinquency rate compared to March 2020, when it was 3.6 percent.
Despite a dip in newly pending sales, homes are flying off the market at a record pace and inventory remains incredibly scarce.
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