The shifting landscape of the housing market

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Published Date 9/23/2024

What goes around comes around. As Realtor.com’s Julie Gerstein reports, after years of battling tight inventory and skyrocketing prices, homebuyers are finally starting to see the tables turn.

In a remarkable turn of events, the US housing market has witnessed a dramatic increase in available homes for sale. From a mere 350,000 houses on the market in 2022, when interest rates were at a historic low of 3%, the number has skyrocketed to approximately 910,000 homes in 2024.

This surge can be attributed to several factors, with new construction playing a significant role. The National Association of Realtors projects a 4.7% increase in single-family housing starts this year, followed by a 4.2% rise next year. However, new builds aren't the only contributor to this trend. Overall housing stock has seen a 35.8% year-over-year increase, reaching levels not seen since May 2020. This expanded inventory offers relief to potential buyers, providing more options and increased negotiating power.

Not surprisingly, the pace of sales has also slowed, with homes now spending an average of 53 days on the market - a week longer than the previous year. This shift has compelled sellers to adjust their expectations and make concessions. August saw the highest share of listings with price cuts in over five years, reaching 19.3%.

Despite an overall 1.3% year-over-year decrease in median home prices (now at $429,990), the cost per square foot has actually risen by 2.3%. This suggests that while prices may appear more attractive, buyers are getting less space for their money.

The inventory surge has been particularly notable in certain regions. The South led with a 45.6% increase in listings, followed by the West at 34.5%, the Midwest at 23.1%, and the Northeast at 13.9%. Among major metropolitan areas, Tampa, San Diego, and Orlando experienced the most significant inventory growth.

This shift in the market dynamics extends beyond just home buyers. The rental market is also feeling the effects of increased inventory. As more properties become available, landlords and property managers may need to offer incentives or reduced rents to fill vacancies. For those considering a home purchase, the current market presents a unique opportunity. With a growing supply of homes, buyers now have more leverage than they've had in years.

As we navigate this evolving landscape, one thing is clear: the US housing market is undergoing a significant transformation. In the words of Dorothy from The Wizard of Oz," "There's no place like home" - and now, there are more homes to choose from than ever before.

Realtor, TBWS

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