Realtor.com's® August 2019 housing trend report, out Tuesday, registered the first U.S. homes-for-sale inventory decline in a year.
Conversely, August data also shows an earlier than usual seasonal slowdown in the national median listing price as consumers react to news of economic uncertainty.
"The state of the housing market as we head into the latter half of 2019 is a tug of war between increased affordability and economic anxiety. We're starting to see this tension play out in our August data," said George Ratiu, senior economist for realtor.com®. "On the one hand, lower interest rates have given buyers more purchasing power, which is contributing to August's decline in national inventory. However, concerns over trade wars and cutbacks in corporate spending are causing some buyers to postpone their search. This is contributing to both the slow down in prices, as well as the inventory decline, as buyers stay put in their current homes."
Earlier this spring, realtor.com® predicted U.S. inventory would decline in fall 2019. As lower than expected mortgage rates combined with rising wages, buyers snapped up existing homes and prompted an early arrival in August of a 1.8% decline. The U.S. median listing price in August was $309,000, still 4.9% higher than a year ago, but 1.8% lower than July -- the largest drop from July to August since 2012.
Typically, home prices increase from June until September. Although July to August declines do occur, the size of this drop points to an earlier than usual deceleration of prices, likely attributed to recent concerns over economic uncertainty.
This data is consistent with the findings of realtor.com®'s August 2019 home shopper survey, which showed that 11% of buyers expect a recession by the end of this year, and 33% expect one in 2020. If a recession does hit, 56% of home shoppers stated that they would pause their home search until the economy recovered.
According to Ratiu: "These strong but opposing forces make it more difficult to predict what will happen in the second half of this year. If the headwinds of economic uncertainty intensify, it could prompt a decrease in buyer demand and shift housing inventory's current trajectory. But if increased purchasing power prevails, we could see even more inventory declines and intensified competition between buyers."
The median age of U.S. inventory in August reached 62 days. The typical property spent three days longer on the market compared to last August and four days longer than July 2019.