
The 2024 housing landscape is witnessing a surge in available homes, but this uptick doesn’t necessarily point to a flourishing market.
In fact, the increase in housing inventory is coinciding with a spike in unsold properties.
One possible explanation for this trend might be the reduced mobility among renters, many of whom are opting to stay put in their current homes rather than confront soaring housing costs.
Current Market Trends
Logan Mohtashami, HousingWire’s Lead Analyst, emphasizes that the rising inventory is a defining characteristic of today’s market.
Inventory levels are creeping back to figures not seen since 2019, just before the COVID-19 pandemic reshaped the industry.
While a larger pool of available homes might suggest a move toward normalized market conditions, projections indicate that by early 2025, housing inventory could exceed 27% compared to the beginning of 2024.
Amid these trends, Redfin’s November report on unsold inventory raises some red flags.
It reveals that homes on the market for over 60 days are increasingly becoming commonplace.
Shockingly, 54.5% of listed homes in November fell into the “stale inventory” category—a rise of 460 basis points from the previous year and the highest rate recorded since November 2019.
Additionally, homes that did find buyers took an average of 43 days to enter into contracts, marking the slowest pace since 2019.
Regional Insights
States like Texas and Florida have experienced the most significant jumps in property listings this year, resulting in substantial proportions of unsold inventory.
Among the major U.S. metropolitan areas, Miami reported a staggering 63.8% stale inventory rate, closely trailed by Austin at 62.4%, Fort Lauderdale at 62.3%, San Antonio at 60.3%, and Orlando at 59.9%.
Real estate professionals attribute many of these unsold listings to inflated home prices.
A Redfin agent highlighted that homes priced too high, or those that are not in livable condition, tend to stick around much longer than desirable.
She pointed out that homes priced correctly are attracting buyers swiftly—often selling within three to five days—while overpriced listings may languish unsold for over three months.
Shifts in Renting Behavior
A trend is emerging, indicating that renters are less inclined to move.
Currently, about 33.6% of renters in the United States have stayed in the same rental unit for at least five years, significantly up from just 28.4% a decade ago.
Notably, roughly one in six renters maintains their residence for ten years or more, largely due to surging costs related to homeownership, moving expenses, and agent fees.
November data from Redfin further illustrates this trend as the growth rate of renter households outpaces that of homeowners.
Although rental prices soared during the pandemic, they have begun to stabilize in the past couple of years, while home prices and mortgage rates continue their upward climb.
This stability has encouraged renters to hold onto their current homes, as they aim to avoid the risk of sudden rent increases.
With the anticipated arrival of new apartment constructions, rental rates might soon decline, potentially paving the way for a more renter-friendly environment in 2025.
Looking ahead, there exists a cautious sense of optimism for both potential homebuyers and sellers—if mortgage rates begin to fall.
HousingWire forecasts a dip in mortgage rates to between 5.75% and 7.25%.
Such a change could invigorate home sales as market dynamics shift, alleviating some of the constraints posed by the lock-in effect that homeowners currently face.
However, the persistent rise in home prices may continue well into 2025, which could leave overall inventory levels stagnant.
Source: Housingwire