Tepid demand is keeping the majority of homes in the resale market listed for at least 30 days, according to a new report from Redfin.
Approximately 61.9% of homes that were on the market in May had been listed for at least 30 days without going under contract, a significant increase from 50% as recently as two years ago. Redfin data indicates 40.1% of homes on the market in May had been listed for at least two months without going under contract.
Homes sitting on the market for more than a month have been increasing since March when the growth in new listings accelerated but demand remained muted due to rising mortgage rates. According to Redfin, more homes for sale coupled with slower demand has left “less-desirable listings” on the market longer.
Redfin attributes homes sitting on the market longer to high mortgage rates and high home prices. Many prospective home buyers are priced out, tempering demand in the resale market at a time when the housing market typically heats up. The average 30-year fixed mortgage rate is 6.99%, according to Redfin, more than double the pandemic-era low, while the median monthly housing payment is $30 shy of its record high.
While the resale market remains hampered, new home builders are continuing to benefit from the ability to buy down mortgage rates and offer other sales incentives, helping alleviate concerns from prospective buyers. Zonda data for April indicated new-home sales were 4.8% higher than the same month in 2023 and three in five builders reported demand is either on track or stronger than expected in 2024. Nearly 60% of new-home communities in April offered some type of financing incentive in April, according to Zonda.
According to Redfin, the share of resale inventory sitting on the market for 30-plus days is growing fastest in the Dallas metro. Just over 60% of Dallas listings in May had been on the market for at least 30 days. Resale inventory sitting for more than a month is also increasing most significantly in Fort Lauderdale, Florida; Tampa, Florida; and Jacksonville, Florida. The share of homes sitting on the market for at least 30 days has declined the most in Seattle; Las Vegas; and San Jose, California.
