More Than 3 in 5 Home Listings Are Now ‘Stale’ As Record-High Costs Dampen Demand

Rhea-AI Summary

More than 61.9% of homes listed in May remained unsold for at least 30 days, according to Redfin (NASDAQ: RDFN). This is an increase from 60% a year ago and 50% two years ago. High mortgage rates and record home prices are reducing buyer demand, leading to an accumulation of unsold homes. The 30-year fixed mortgage rate is currently at 6.99%, contributing to a near-record high median monthly housing payment. In Dallas, 60% of listings in May were unsold for over 30 days, up from 53% last year. Conversely, Seattle saw a decrease in unsold homes from 50.5% to 41.2%.

Positive

• Move-in ready homes in desirable neighborhoods are still selling quickly.
• Seattle saw a decline in unsold homes from 50.5% to 41.2%.
• Las Vegas' unsold inventory decreased from 63.9% to 55.9%.
• San Jose reduced its unsold inventory from 42.2% to 34.4%.

Negative

• 61.9% of homes listed in May remained unsold for at least 30 days.
• High mortgage rates at 6.99% are deterring buyers.
• Median U.S. monthly housing payment is just $30 shy of its record high.
• 40.1% of homes listed in May were unsold for at least 60 days.
• Dallas saw an increase in unsold homes from 53% to 60%.
• Florida metros like Fort Lauderdale and Tampa experienced a rise in unsold homes.

Insights

Financial Analyst

The increase in homes sitting on the market for over 30 days is a significant indicator of declining demand in the housing market. The share has grown from 60% to 61.9% in just a year. This slowdown, despite being a seasonal period where the housing market typically warms up, suggests a cooling trend driven by high mortgage rates and record-high home prices. High mortgage rates, currently at 6.99%, significantly impact affordability, pushing potential buyers out of the market. The median U.S. monthly housing payment is also nearing its record high, further straining buyers' budgets. For investors, this suggests potential weaknesses in real estate-related investments and emphasizes the importance of closely monitoring housing market indicators and mortgage rate trends.

Market Research Analyst

The data indicates a geographic disparity in how housing inventory is aging. Markets like Dallas and Florida metros are experiencing a sharp increase in stale listings, attributed partly to high construction rates and concerns over natural disasters. Conversely, cities like Seattle, Las Vegas and San Jose show a decline in homes sitting on the market. This could point to regional economic factors and differing local market dynamics. For investors, this suggests the necessity of a regional analysis when considering real estate investments, as market conditions can vary greatly across different areas.

More homes are sitting on the market for at least 30 days without going under contract, as homebuying demand falters in the face of high housing costs

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — More than three in five (61.9%) homes that were on the market in May had been listed for at least 30 days without going under contract, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up from 60% one year earlier and roughly 50% two years earlier.

The share of homes sitting on the market for at least one month has been increasing year over year since March, when growth in new listings accelerated but demand from buyers remained tepid, as it has been since mortgage rates started rising in 2022. More homes for sale paired with slow demand means that less-desirable listings are piling up, leaving some of them without a buyer.

This is according to an analysis of Redfin’s housing-market data, which goes back through 2012. The inventory data in Redfin’s report includes homes that were on the market for at least 30 days, or at least 60 days, without going under contract and were actively listed on the final day of the month.

Stubbornly high mortgage rates and record-high home prices have priced out many homebuyers, tempering demand even at a time of year when the housing market is typically warming up. The average 30-year fixed mortgage rate is 6.99%, more than double the pandemic-era low and just slightly below October 2023’s two-decade high of 7.8%. The median U.S. monthly housing payment is just about $30 shy of its record high.

Redfin agents report that move-in ready homes in desirable neighborhoods are still selling quickly, but listings that don’t fit that bill are starting to pile up in some parts of the country.

Two in five listings are sitting on the market for 60 days or more

Two in five (40.1%) homes that were on the market in May had been listed for at least two months without going under contract. That’s unchanged from a year earlier and up from 27.8% two years earlier.

The share of homes sitting on the market for at least 60 days was essentially flat year over year in both April and May. Before that, the metric had posted annual declines since last September. The share of homes sitting for at least 60 days is likely to start increasing next month so long as mortgage rates stay high, according to Redfin economists.

Metro-level highlights: Unsold inventory, May 2024

The share of inventory sitting on the market for 30-plus days is growing fastest in Dallas. Just over 60% of Dallas listings that were on the market in May had been listed for at least 30 days, up from 53% a year earlier. Next come three Florida metros: Fort Lauderdale (75.5%, up from 68.2%), Tampa (68.7%, up from 61.9%) and Jacksonville (69.2%, up from 62.9%). Inventory is growing stale fast in Texas and Florida largely because those states are building far more homes than anywhere else in the country, contributing to rising supply, and because some homebuyers are nervous about the increasing prevalence of natural disasters.

On the other end of the spectrum, the share of homes sitting on the market for at least 30 days has declined most in Seattle (41.2%, down from 50.5%), Las Vegas (55.9%, down from 63.9%) and San Jose, CA (34.4%, down from 42.2%).

To view the full report, including charts and additional metro-level data, please visit: https://www.redfin.com/news/stale-inventory-may-2024

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240612285815/en/

Redfin Journalist Services:

Angela Cherry

press@redfin.com

Source: Redfin

FAQ

What percentage of homes listed in May 2024 remained unsold for at least 30 days?

61.9% of homes listed in May 2024 remained unsold for at least 30 days.

How have mortgage rates affected homebuyer demand in 2024?

High mortgage rates at 6.99% have reduced homebuyer demand, contributing to an increase in unsold homes.

Which city saw the highest increase in unsold homes in May 2024?

Dallas saw the highest increase, with 60% of listings unsold for over 30 days, up from 53% last year.

How is the median U.S. monthly housing payment in May 2024 compared to its record high?

The median U.S. monthly housing payment is just $30 shy of its record high.

Which cities saw a decrease in the percentage of unsold homes in May 2024?

Seattle, Las Vegas, and San Jose saw a decrease in the percentage of unsold homes in May 2024.