According to data from Realtor.com, the US housing market has continued to experience a surge in inventory, with the number of homes available for sale rising by 67.8% YoY in February. The latest figures represent the sixth consecutive month of inventory growth, with 577,972 active listings recorded last month, an increase of approximately 234,000 homes compared to February 2022. However, while the current level of inventory reflects a strong recovery from the pandemic lows, it remains 47.4% lower than the levels seen in 2017-2019.
The inventory growth can be attributed to homes spending more time on the market, with the average home in February taking 67 days to sell. While this was 20 fewer days compared to the average February in 2017-2019, it was 23 days longer than February 2022. With interest rates rising and buyers facing affordability challenges, inventory growth has been driven by homes taking longer to sell.
In addition, fewer newly listed homes were added to the market in February compared to last year. There were 312,196 newly listed homes in February, down 15.9% YoY. New listings also remain 27% below the levels seen between 2017 and 2019. However, the median price of homes for sale continued to rise, reaching $415,000 in February, up 7.8% YoY. This represents a lower growth rate than January’s 9.7%, with a growing share of homes seeing price reductions, from 5.4% in February 2022 to 13% in February 2023.
The market also saw homes take longer to sell in many of the nation’s largest cities, with 47 of the top 50 metros seeing an annual increase in time on the market. The cities with the largest increases were Austin (52 more days YoY), Raleigh (51), Denver (42) and Las Vegas (42), which all experienced a surge in home sales due to the lower cost of homes. However, as affordability has waned, these cities have seen a slowdown in sales activity, leading to longer times on the market.
Realtor.com economists have noted that the share of homes with price reductions declined from January to February, with a drop-off that appears to be larger than typical seasonal movements. They suggest that this could signal a cushion for price growth, although it remains to be seen if this trend will continue.