U.S. property prices dipped in July, but a perpetual shortage of home stock means they won’t fall much further, according to a report from Realtor.com on Thursday.
The number of homes on the market across the country had been ticking up since the spring of 2022, albeit slowly, from the extreme lows reached during the peak of the pandemic-era property market frenzy.
But last month, active listings fell 6.4% annually, marking the first time inventory has fallen annually since April 2022, the report said. The drop has left the number of homes on the market almost 50% below July 2019, before the pandemic hit.
But the lack of choice for home buyers is buffered by the silver lining of listing prices tipping in their favor. The median listing price now stands at $440,000, a fall of 0.9% from the same time last year; July was the second month in a row to see an annual decline in prices.
Typical listing prices are now almost 40% above what they were in July 2019.
“While a second monthly year-over-year decline in list prices bodes well for potential buyers, the ongoing lack of homes available for sale continues to prop up home prices and will keep declines relatively modest for the remainder of the year,” said Danielle Hale, chief economist for Realtor.com.
While interest rate hikes are cutting into buyers’ purchasing power, they’ve adapted to the economic conditions faster than sellers have, “many of whom are still on the sidelines, locked in to lower interest rates and unwilling to cash in their home’s equity to purchase another,” she said. “That’s putting a damper on home sales, which will likely post their smallest annual tally this year in over a decade.”
Facing high borrowing rates and higher home prices, a growing number of would-be home buyers are expanding their searches to much further afield, the online property portal said.
In the second quarter 60.3% of all listing views in Realtor.com originating from any of the top-100 metro areas in the U.S. were for homes located outside their current metro areas, up 0.7% from the first quarter and 4.1% from the same period last year.
“Housing affordability isn’t likely to improve anytime soon, so it’s not surprising to see that Americans are on the move and increasingly searching for homes in more affordable areas of the country where they can stretch their housing dollars further,” said Jiayi Xu, an economist at Realtor.com. “Sellers are much more likely to see interest from out-of-towners than in years past, and from where that interest is coming might be the most surprising.”
Source : MANSIONGLOBAL