Housing Market

Is the housing market finally turning a corner?

Mike Simonsen of Altos Research dives into data showing growth in inventory and home sales to close out the year

As 2023 draws to a close soon, housing inventory has been rising very late in the year. Last year at this time, sellers and homebuyers hit the brakes hard.

This year is slow, of course, but not dropping, so we finally have a fractionally better home-sales growth rate over the same week a year ago.

Watch the weekly housing market recap video above to get the latest housing market data download from Altos Research.

Don’t have time to watch the full video? Here are some key housing market data takeaways:

Inventory peaks for the year

There are 567,000 single-family homes on the market, which is unchanged from last week. Remember the Altos rule: If rates go up, inventory will build in 2024. If rates fall, inventory will drop again as demand heats up.

Meanwhile, there are 66,000 new, single-family listings this week, with 11,000 of those already under contract. This means inventory has (finally) peaked for the year.

New contracts pick up year over year

We saw 52,500 new contracts started this week for single-family home purchases, which is low. However, it’s higher than the same week last year, signaling an improvement for our supply-constrained market.

As long as mortgage rates don’t spike again, 2024 is set up for slight home-sales gains over 2023. Additionally, we’re seeing more immediate home sales. This means homebuyers leaned into the new supply, which also implies a slight sales-volume growth is coming.

Price cuts have also hit a pinnacle

About 39.2% of the homes on the market have had a price cut, meaning price reductions have peaked for the year. The data doesn’t show any real signals for future sales-price declines.

In fact, home prices continue to be 1% to 2% above last year’s levels and will hold there for the rest of the year. The median price of single-family homes in the U.S. is just under $430,000.

Mike Simonsen is President of Altos Research.

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