Weekly Housing Trends View — Data Week Ending June 18, 2022

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In addition, we continue to give readers more timely weekly updates, an effort that began in response to the rapid changes in the economy and housing as a result of the COVID-19 pandemic. Generally, you can look forward to a Weekly Housing Trends View and the latest weekly housing data on Thursdays with a weekly video update from our economists on Fridays. Here’s what the housing market looked like over the last week.

What this Week’s Data Means:

Another influx of newly listed homes for sale combined with fewer home sales helped push up the number of homes actively seeking a buyer to a level 21% above this week last year. Despite this improvement, home price growth continued at a double-digit pace, but didn’t accelerate, holding at 16.9% annual gain for a third consecutive week.

It’s not just homeowners grappling with higher prices. Rents are also soaring to new highs, making it harder for movers to find a refuge from inflation no matter whether they’re buying or leasing. This is one of the reasons that buying a home continues to be attractive. Despite the huge cost increases relative to one year ago, buyers today using a fixed-rate mortgage can at least be assured that the majority of their monthly housing costs will remain fixed going forward, and even those taking out an adjustable rate mortgage are likely to be guaranteed a fixed-rate for the first 5 to 7 years. 

In an environment where shoppers are mindful of their budgets, affordable housing markets, typically found in the Northeast, Midwest, and South, are attracting home shoppers, as we see in our May 2022 Hottest Housing Markets. Higher prices and higher mortgage rates have been a stumbling block that is substantial enough to knock some home shoppers out of the purchase market for the year. And yet, with flexibility still available to many workers, those who are willing to explore new areas may find that buying a home is still possible on their budget. 

Key Findings:

• The median listing price grew by 16.9 percent over last year. The typical asking price of for-sale homes was higher than one year ago by double-digits for a 27th week, and for the third time in 9 weeks, this week’s growth rate was not an acceleration over the previous week’s pace. In fact, the rate of home price growth has held steady in each of the most recent three weeks. We’re still well above a historically normal rate of home price growth. In fact, the incredible momentum of home price growth in 2022 was a reason we recently revised our home price forecast up for the year. However, as the number of homes for sale increases and costs of financing at higher mortgage rates rise, we expect home price growth to slow.

• New listings–a measure of sellers putting homes up for sale–were up 6% above one year ago.  Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. That’s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options. We’ve seen more homes come up for sale this year compared to last year in 11 of the last 12 weeks.

• Active inventory continued to grow, rising 21% above one year ago.  Inventory was roughly even with last year’s levels at the beginning of May and the gains have mounted each week. Still, our May Housing Trends Report showed that the active listings count remained nearly 50 percent below its level at the beginning of the pandemic. In other words, we’re starting to add more options, but the market needs even more before home shoppers have a selection that’s roughly equivalent to the pre-pandemic housing market.

• Homes spent 4 days less on the market than this time last year. More homes for sale will eventually bring more balance to the housing market, cooling the ultra-fast pace of home sales we’ve seen over the last few years. And while the gap with last year is shrinking, this still means a faster-than-ever-before pace of home sales. Our May Housing Trends Report showed that homes hit another new low record for time on market, and we expect another record in June, when homes typically spend the shortest amount of time for-sale.

Data Summary:

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