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Home buyers are seeing a larger number of unsold homes on the market for the first time since May 2023, according to the December Monthly Housing Trends Report.

While home buyers typically avoid big moves during the holiday season unless necessary, home sellers in December 2023 were active with 9.1% more newly listed homes compared to 2022.

"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. While the uptick in December inventory levels is encouraging, 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%,” says Danielle Hale, chief economist,

“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."

Month-over-month change between November and December has historically hovered between 6.8% and 13.2%. Yet for December 2023, there was a more modest 5.5% decrease, indicating a smaller than normal drop for the time of year, according to the report.

Looking at the 50 largest metros, 23 saw increased inventory levels year-over-year with Memphis (28.5%), New Orleans (25.5%), and San Antonio (20.9%) experiencing the most growth. However, as Hale mentions, the country is still seeing lower inventory levels compared to pre-pandemic times with the exception of San Antonio (12.8%), Austin (11.7%), and New Orleans (11.6%). The three metros saw higher levels of inventory in December 2023 compared to typical 2017 to 2019 levels.

Compared to December 2022, the median price of homes for sale in December 2023 remained relatively stable, growing by 1.2% with a few experiencing a decrease including San Jose with a decrease of 7.1% in median listing price year-over-year, as well as San Antonio (-3.9%) and Memphis (-2.5%).

According to the report, homes are moving faster than before with homes generally spending 61 days on the market. The period is four days shorter than December 2022 and roughly two weeks shorter than before the COVID-19 pandemic.