The housing market is undergoing a major shift after two years of red-hot home sales in a costly and competitive seller’s market, but as buyers pump the brakes on home purchases and regain bargaining power, inventory is taking a hard hit nationwide. As homeowners with a low mortgage rate become increasingly reluctant to sell, the share of new listings is 25% lower each week than is expected for this time of year, Bill McBride reports in the CalculatedRisk Newsletter.
As new listings begin to fall, active inventory growth is also slowing after months of consecutive gains, and while that may seem dire for prospective buyers, the Case-Shiller National Index showed a deceleration in house price growth to 18.0% in June.
We are seeing a significant year-over-year decline in the housing market, with more price reductions, and fewer sales. It will take some time to see the impact on house price growth, but that is coming too. However, inventory growth has stalled recently as new listings have declined year-over-year.
Next week, existing home sales will likely show another sharp year-over-year decline in sales for August - with sales solidly below 5 million SAAR again. Housing starts will probably show further declines (and still a near record number of homes under construction).
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