Days On Market Ticks Up, Signaling Cooling Housing Demand
The amount of time listings are staying on the market is increasing, signaling cooling demand as would-be buyers face higher mortgage payments and greater supply.
The number of days US homes were on the market before selling grew for the first time in more than two years, according to research released today by Realtor.com.
Last month, a typical home spent 42 days on market, five days more than last year but still 22 days faster than in 2017-2019, on average. Realtor.com analysts say the trend reflects a housing market that’s facing a reset after two pandemic-era years of “frenzied” buyer demand that outpaced supply. Inventory is expected to rise and what Realtor.com calls “more typical seasonality” expected to return in the fall.
Time on market was lower across the 50 largest U.S. metros at 37 days, on average relative to the national median, but also slowed year-over-year. The biggest yearly gains in time on market were in Austin, Texas (+16 days), Raleigh, N.C. (+12 days), Riverside, Calif. (+11 days), Las Vegas (+11 days) and Nashville, Tenn. (+10 days). Meanwhile, Miami (-9 days) and Richmond, Va. (-1 day) were the only two cities of the top 50 surveyed by Realtor.com where time on market declined compared to August 2021 figures.
Inventory also increased in August by 26.6% year over year, providing would-be buyers more options to consider in their search. Pending listings also posted a larger annual decline in August than in June, down 21.9% year over year, in what Realtor.com calls a reflection of moderating demand as buyers face 61% higher mortgage payments than last year.
“For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce. As a result of this shift coupled with higher mortgage rates, competition continued to cool in August, with listing price trends indicating that home shoppers are tightening their purse strings,” said Danielle Hale, Chief Economist for Realtor.com®. “As we soak up the last days of summer, the housing market is beginning to find more balance between buyer-friendliness and still favorable selling conditions.”
The national median list price in August was $435,000, a 14.3% year over year change and up 36.9% over August 2019. The biggest listing price gains last month were logged were in Miami (+33.4%), Memphis, Tenn. (+25.8%) and Milwaukee (+25.0%). And on the flip side, the number of for-sale homes with price reductions ticked up year-over-year in 49 of the 50 largest metros, led by Phoenix (+30.9 percentage points), Austin (+24.8 percentage points) and Las Vegas (+24.4 percentage points).