Could a spring thaw be coming for U.S. home buyers? Realtor.com thinks so.
In its latest housing report, buyers can expect a positive combination of more available properties and a slight decrease in prices heading into the warmer months.
In March, there was a significant increase in the percentage of homes with price reductions, reaching 15%—the highest in five years. In additional, the total number of homes actively for sale experienced a notable growth of 23.5% compared with last March, although inventory remains considerably lower than pre-pandemic levels.
"Sellers are starting to warm up to the current environment, wading into the market in increasing numbers despite market mortgage rates that are likely above their existing rate, if they have a mortgage. As a result, data shows surprisingly competitive pricing trends among sellers, especially in the lead up to this year's Best Time to Sell, which Realtor.com reported will be between April 14 and 20," said Danielle Hale, chief economist of Realtor.com. "As seller optimism swells, we may see even further inventory gains later in the season that will likely create a more balanced environment for hopeful home buyers."
Here are the 10 metros with the largest share of price reductions of total inventory:
- Tampa-St. Petersburg-Clearwater, Florida, 27.6%
- Phoenix-Mesa-Chandler, Arizona, 23.%
- Austin-Round Rock-Georgetown, Texas, 22.3%
- Jacksonville, Florida, 22.1%
- San Antonio-New Braunfels, Texas, 21.8%
- Orlando-Kissimmee-Sanford, Florida, 20.2%
- Portland-Vancouver-Hillsboro, Oregon-Washington, 20.1%
- Miami-Fort Lauderdale-Pompano Beach, Florida, 19.7%
- Dallas-Fort Worth-Arlington, Texas, 19.5%
- Memphis, Tennessee-Mississippi-Arkansas, 19.3%
Home Sellers Coming Out of Hibernation
Between January and March, the number of homes available for sale reached its peak since 2020. But, despite signs of improvement in inventory, the market remains 37.9% below pre-pandemic levels. In February, there was a notable increase in home inventory within the price range of $200,000 to $350,000, surpassing all other price categories. The number of available homes in this range grew by 30.5% compared with March 2023.
Several metropolitan areas experienced significant increases in the number of homes available for sale. Florida proved to be a hot spot, as Tampa led the way with a 58.3% surge. Orlando and Miami also saw notable gains, with inventory rising by 53.3% and 48.2%, respectively.
The Ups and Downs of Median List Prices
The national median list price experienced a slight increase, rising from $415,500 to $424,900 between February and March. In a year-over-year comparison, the median list price saw a mere 0.2% increase from March 2023. However, in the span of two weeks in March, the median list price experienced a decline, falling below the levels seen in the previous year.
In a comparison of the 50 largest metros, 18 of them experienced a decline in their median list price compared with the previous year. Some of the cities that saw a decrease include Miami (-8.4%), Oklahoma City (-8.3%), and San Francisco (-7.6%).
On the other hand, cities such as Los Angeles (+15.1%), Richmond, Virginia (+11.8%), and Pittsburgh (+11.6%) witnessed significant increases in their median list prices. Fluctuating prices impact the requirements for financing a home. Mortgage rates have remained steady at around 6.6% to 7% over the past three months, resulting in a slight increase of $63 in the cost of financing a home (assuming a 20% down payment) compared with a year ago.
