A sharp rise in mortgage rates two years ago sent the housing market into a deep freeze as homeowners with 3% mortgages were reluctant to sell and lose out on those low rates. But now that interest rates have fallen in recent weeks, signs of a selloff have proliferated.
Realtor.com reports that the number of new listings increased by 11.6% in September compared to September 2023. The number of active listings increased by 34%, giving buyers more choice than in recent years.
“Sellers, especially those locked in to low interest rates, are waiting for market conditions to change,” said Daniel Hale, chief economist at Realtor.com. “It has fallen to its lowest level in a year.” There have been signs of movement in recent years, with more sellers putting their homes on the market even during typical real estate slow periods. ”
Hale said Realtor.com expects mortgage rates to stay around 6% through the end of the year, which is a far cry from the high of 7.8% in October 2023.
“Improving purchasing power”
“This increases purchasing power for many homebuyers, a bonus that outweighs seasonal factors that make this the best time to buy,” she said.
The major cities with the highest growth in real estate listings are:
subway
Year-on-year change in number of new listings (%)
Median suggested retail price
Seattle – Tacoma – Bellevue, WA
41.8%
$772,425
San Jose – Sunnyvale – Santa Clara, California
27.1%
$1,432,170
Washington-Arlington-Alexandria, DC-VA-MD-WV
26.2%
$599,948
Denver – Aurora – Lakewood, Colorado
25.5%
$610,250
Boston – Cambridge – Newton, Massachusetts – New Hampshire
24.4%
$839,900
Raleigh Cary, North Carolina
24.2%
$453,165
Los Angeles – Long Beach – Anaheim, California
22.6%
$1,154,440
San Diego – Chula Vista – Carlsbad, California
21.5%
$997,000
Providence – Warwick, RI-MA
21.5%
$567,500
Richmond, Virginia
20.1%
$442,346
But housing prices are still rising
The increase in listings may provide buyers with some reassurance from rising home prices. With so few homes on the market in recent years, home prices have continued to rise, albeit at a slower pace.
Data from September 2024 shows a significant increase in home prices compared to homes listed before the pandemic. Median listing price per square foot increased 2.3% year over year, while price per square foot increased 50.9% compared to September 2019.
For the top 50 metro areas, price increases per square foot ranged from 22.7% to 71.9%. Leading the way, perhaps unsurprisingly, is the New York metropolitan area, where prices per square foot rose 71.9% compared to September 2019.
Mark Huffman reporter
Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices, the economy, and has extensive coverage of negative options sales. He previously served as a reporter and editor for the Associated Press in Washington, D.C., and as a correspondent for Westwood One Radio Networks and MarketWatch.
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