December 2nd 2023

Black Friday bargains might be over by now, but mortgage rates have nonetheless continued heading in a wallet-friendly direction. As of December 2, the average 30 year mortgage rate is 6.907%, a 3 month low.

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“Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” said Sam Khater, Freddie Mac’s chief economist.

While mortgage rates have grabbed many housing headlines of late, another surprising bright spot has appeared: Fresh real estate listings are hitting the market, which is highly unusual for this time of year.

“New listings registered lower than prior-year levels from mid-2022 through roughly five weeks ago,” says Realtor.com® economic data manager Sabrina Speianu in her recent analysis. However, “recently the trend has reversed, as new listings during the week outpaced the same week in the previous year by 8.9%, the largest increase since summer 2021.”

Will this listings boon, coupled with falling mortgage rates, finally grease the rusty housing market wheels? We’ll explain what this and other breaking real estate data mean for buyers and sellers in this latest installment of “How’s the Housing Market This Week?”

The mortgage rate reprieve

Falling mortgage rates might finally be luring home sellers back to the market, freeing them from the “lock-in effect” where they felt compelled to stay put to hang onto their current, much lower-rate home loans.

“If homeowners respond to the descending mortgage rates by entering the market, a more balanced housing market could unfold in the coming months,” predicts Speianu.

And this, in turn, might also help usher in a possible break in home prices.

In November, home prices came in at a median of $420,000. And for the week ending Nov. 25, the median list price grew by 1.2% compared with the same time last year.

That’s in keeping with the recent trend of year-over-year median home prices, which have remained stubbornly high despite higher mortgage rates.

Yet, as Speianu points out, “Going forward, additional housing supply could help alleviate the long-standing affordability crunch by taking pressure off of home prices.”

As far as what the future might hold in terms of affordability, the Realtor.com® 2024 Housing Forecast predicts that America’s median home price will dip by an average of 1.7% compared with 2023.

Active inventory continues to drag

While the rise in fresh listings is a sweet surprise, the total number of homes for sale is still fairly stagnant.

For the week ending Nov. 25, overall active inventory (a combination of old and new listings) is up just slightly by 1.8% compared with last year.

Plus, seasonally speaking, the number of listings tends to dwindle as we head into the winter months.

“For the remainder of the season until March, we expect that inventory will experience a typical seasonal decline,” says Speianu. This “will create an additional challenge for those hoping to also take advantage of seasonally low listing prices in the coming months.”

Why homebuyers still need to act fast

Home shoppers weighing whether or not to get out there and make an offer should know that whatever they decide, they had best do it quickly since the pace of home sales is picking up.

For the week ending Nov. 25, homes spent two fewer days on the market compared with the same time last year. (On average, homes spent 52 days on the market in November.)

In Cape May County, sold listings are only spending about 40 days on average on the market, below the national average and far below the historical norm for Jersey Cape towns, which had been about 100 days.

Many homebuyers realize that shopping in the off-seasons can land you a great deal.

This marks eight consecutive weeks that a typical home was snapped up faster than the same week a year ago.

“This fall, the time a typical home spends on the market has mostly been growing much more slowly than is typical for this season,” says Speianu.