New listings are down 21% year over year, according to Realtor.com (via Getty) Getty Images
The all-important spring season in the housing market has begun, but there aren’t many homes for sale.
According to Realtor.com (see chart below), only 392,016 US homes were listed for sale in April 2023. That’s down from April 2022’s 497,844 — a period notorious for its tight supply — and far down from April 2019’s 552,082.
Redfin Chief Economist Daryl Fairweather perhaps best summed up the phenomenon when she tweeted last week: “Homeowners are quietly exiting the housing market.”
Fairweather is a little tongue-in-cheek when she invokes silent quitting — which refers to employees doing minimal work — to describe the lack of new inventory. However, she has found something: high mortgage rates have been accompanied by fewer sales/buys to the upside.
As Fortune has previously explained, for someone with a 2% or 3% mortgage rate — one of the biggest financial benefits of the pandemic — it just doesn’t make economic sense to sell their home and then try to buy a new home at a mortgage rate of 6%. If they did, they would receive a substantially higher monthly mortgage payment.
Many potential buyers are choosing to stay there and fewer homes are coming to the market.
Check out the new real estate listings coming to market according to the Realtor.com chart
The withdrawal of sellers/buyers pushing upwards is not only felt on the supply side, but also hits the demand side. You see, when a particular homeowner decides to hold off on selling real estate, it means one less home comes on the market and one less buyer comes on the market.
So, do buyers or sellers have the upper hand?
Unlike total new listings (i.e. the number of homes coming onto the market in a given month), total active listings (i.e. total inventory on the market) is a better indicator of the balance of a market at any given time Time.
While April 2023 saw 21.2% fewer US homes for sale (ie, “New Listings” shown in chart above) compared to the same month last year, there were actually 49.3% more homes for sale (ie, “Active Listings” shown in chart below) in April 2023 than in April 2022. The reason? The rise in mortgage rates over the last year meant homes stayed on the market longer as days on the market increased, causing inventories to pile up even when there were fewer homes for sale.
However, we are still a long way from a national buyers’ market. In fact, active listings (i.e. inventory) in April 2023 were down 50.3% from April 2019 levels.
View the chart of active housing stock for sale according to Realtor.com
In theory, a market with inventories above pre-pandemic levels has seen a dramatic shift in power dynamics in favor of buyers. By contrast, markets with inventories well below pre-pandemic levels have seen less dramatic changes.
The searchable chart below provides active listings/stock data for the country’s 100 largest housing markets.
View the Active Stock For Sale chart by month
Of the 100 largest housing markets in the nation, only one (Austin’s collapsed housing market) is back to pre-pandemic stock levels (i.e., 2019).
Meanwhile, inventories in the other 99 major markets are still below where they were in April 2019. That includes places like Hartford, Connecticut (down 79.7%) and Bridgeport, Connecticut (down 77.6%).
Would you like to stay up to date on the housing market? Follow me on Twitter at @NewsLambert.