This week, key metrics in the housing market showed declines, a reflection of seasonal trends and external factors. Inventory, new listings, sales, and prices all dipped, largely influenced by the autumn slowdown, the ongoing impact of higher mortgage rates, and the disruption caused by the recent election.
These factors combined to reduce market activity, though such seasonal dips are typical for early November. It’s expected that inventory and new listings will rebound before the month ends as delayed listings hit the market.
The inventory of available homes for sale dropped by nearly 2% to 722,000 units this week. This was partly due to the election, which slowed both new listings and sales, as well as a rise in withdrawn listings.
Despite this week’s dip, inventory has been growing overall compared to the previous year, with a 28% increase in available homes from last year. Given the typical seasonal patterns, inventory is expected to rise slightly in the coming weeks, although it is unlikely to see significant growth past Thanksgiving.
New listings, however, saw a larger drop, with only 49,000 new homes hitting the market—down 20% from the previous week. This decline is attributed to the election and is expected to rebound in the coming week, potentially returning to 55,000.
While this is a notable dip, it’s considered a temporary blip rather than the beginning of a long-term trend. The broader expectation for 2025 is that more sellers will enter the market, leading to greater inventory levels and more homes available for buyers.
Housing Market Sees Seasonal Declines Amid Higher Mortgage Rates and Election Disruptions
Similarly, the number of new pending sales also dipped, with 51,000 new contracts for single-family homes, which is 2% lower than the same week last year. Despite this drop, sales have been trending higher than last year on average.
The recent rise in mortgage rates may be contributing to a shift towards lower sales, but it’s too early to determine if this marks the end of a streak of growth in home sales. If this slowdown continues into the next few weeks, it could indicate a shift in buyer behavior due to the current economic conditions.
Home prices also experienced a slight decline this week, following the trend of reduced activity during the election period. However, even with this dip, prices are still about 4% higher than last year, with the median price of homes at $380,000. Price reductions, though still significant, actually decreased slightly this week, which suggests that sellers are holding firm on their asking prices.
This indicates that, despite weaker demand, there is still an expectation among sellers that home prices will remain stable, and possibly even increase, into 2025. However, affordability remains a concern, and it’s unclear how sustainable elevated prices will be in the long term, especially as high rates continue to stretch buyers’ budgets.
