Realtor.com’s latest Monthly Housing Trends Report offered some encouraging news for homebuyers, revealing that December’s housing market offered an uptick in unsold homes for the first time since May 2023.
The total number of unsold homes, including homes under contract, grew by 3.6% year over year — a pickup that, according to Realtor.com could be attributed to the ongoing climb in newly listed homes. New listings are up 9.1% annually, per Realtor.com data, while active listings are up 4.9% from December 2022.
Home sellers are generally less active during the winter months, and while inventory continues to lag pre-pandemic levels (active inventory remains 34.3% below the typical figure between 2017 to 2019), there are numbers that suggest winter activity is in recovery mode. For example, the month-over-month drop in inventory between November and December has historically hovered between 6.8% and 13.2%. Last year, however, saw just a 5.5% backtrack over the same period.
“Across the U.S., we’re seeing improvements in inventory levels, especially in the South, which experienced a 7.7% increase in active listings year-over-year,” said Danielle Hale, chief economist at Realtor.com.
Inventory in December grew annually in 25 of the country’s 50 largest metros, with many of the largest bumps in the South. The metros posting the largest inventory growth compared to 2022 in December included Memphis (up 28.5%), New Orleans (25.5%) and San Antonio (20.9%). Southern metros Memphis (where new listings were up 35.7%) and Oklahoma City (27.3%) also topped the list when it came to the year-over-year increase of new listings. Thirty-four metro areas saw new listings grow from December 2022.
Hale was swift to point out that while growth in December inventory levels is promising, the elevated interest rate environment remains a substantial barrier against a meaningful supply rebound.
“It is important to note that two-thirds of outstanding mortgages in the U.S. have a rate under 4% and more than 90% have a rate less than 6%,” Hale said. “We are optimistic that inventory levels are moving in a positive direction, but the number of homes on the market is still low relative to pre-pandemic levels. Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes.”
Just three of the 50 largest metros in the country saw higher levels of inventory in December 2023 compared to the typical levels seen between 2017 and 2019: San Antonio (up 12.8%), Austin (11.7%) and New Orleans (11.6%).
