May 2024 U.S. Housing Market Report: Emerging Sellers, Price Adjustments, and Inventory Fluctuations
As we move into summer, the housing market is experiencing notable changes. Real estate expert Steven Thomas highlights a significant increase in sellers, a shift not seen in previous years. This trend is similar to the recovery seen in new car inventories after the pandemic. Factors driving this include growing families needing more space, empty nesters downsizing, and people relocating closer to family. Homeowners who delayed selling due to low mortgage rates and unfavorable conditions are now listing their properties.
Zillow Reports: Market Deceleration with Rising Inventory and Price Adjustments
While Steven Thomas notes more sellers, Zillow's April 2024 report points to a slowdown in market activity. Mortgage rates spiked above 7% for the first time this year, slowing the usual spring surge. Home values grew at a slower pace of 1.2% monthly, with a 4.4% year-over-year increase, reflecting buyers' cautious approach.
The share of listings with a price cut rose to 22.4%, the highest rate for April in six years, up from 17.2% the previous year, signaling a shift towards a buyer's market. Despite price adjustments, homes still sold relatively quickly, just three days slower than the previous year.
Inventory levels increased significantly, with a 6.4% rise from March to April and an 18% year-over-year increase, the second-largest annual rise since 2019. New listings also surged, up nearly 11% month-over-month and 16% year-over-year, giving buyers more options and reflecting growing confidence among sellers.
Redfin Insights: New Construction Stabilizes as Younger Buyers Drive Market Activity
Redfin focuses on new construction dynamics. In the first quarter of 2024, about one-third (33.4%) of single-family homes for sale were newly constructed, a stable figure compared to the previous year. This high volume of new constructions responds to the pandemic's demand surge driven by remote work and low mortgage rates.
Redfin's analysis shows younger buyers, especially Gen Zers and young millennials, are driving market activity. Despite high housing costs, these demographics represented a significant portion of new mortgages in 2023, showing resilience and a strong desire for homeownership.
NAR Report: Strong Home Price Growth in Over 90% of U.S. Metro Areas Despite High Mortgage Rates
The National Association of Realtors (NAR) reports strong market growth in the first quarter of 2024, with over 90% of metro areas seeing home price increases. This growth occurred despite high mortgage rates, with 205 out of 221 metro areas experiencing price rises. This reflects the persistent housing supply shortage driving prices up across the country.
The national median single-family home price rose to $389,400, a 5% increase from the previous year.
Key Takeaways from the May 2024 U.S. Housing Market Report
1. Influx of Sellers: More sellers are entering the market, driven by life changes and adjusting to post-pandemic conditions.
2. Market Deceleration: Zillow reports a slowdown in market activity with a 1.2% monthly increase in home values, leading to a 4.4% year-over-year rise.
3. Increase in Price Adjustments: Listings with price cuts rose to 22.4%, indicating a buyer's market, though homes are still selling quickly.
4. Rising Inventory Levels: Inventory and new listings have increased significantly, signaling a move towards a balanced market.
5. Stability in New Construction: About one-third of single-family homes for sale are newly constructed, maintaining stability compared to the previous year.
6. Young Buyers Driving Market Activity: Gen Zers and millennials are a significant force in the market, taking a substantial share of new mortgages despite high housing costs.
7. Widespread Home Price Growth: NAR reports strong home price growth in over 90% of metro areas, with the median price rising to $389,400, driven by supply shortages.
At Nuvision, we are dedicated to providing valuable insights from industry experts to help our members navigate the complexities of the housing market. Whether you're buying your first home, upgrading to accommodate a growing family, or downsizing for retirement, we understand how important each stage of life is. Our commitment is to support you through all of life's important milestones, ensuring you have the knowledge and resources you need to make informed decisions and build the life you envision.
