If you were curious, there are still nearly 40% more sellers than buyers in the US housing market, a state of affairs classic economic theory suggests should “fix” high prices. Alas.
According to the latest figures from Redfin released early this week, the imbalance during November was 37.2%, the fourth-largest ever behind only this year’s summer months.
The figure below, updated with the new numbers (which included historical revisions), gives you a dozen years worth of context.
At the height of the pandemic housing boom, buyers outnumbered sellers by as much as 36.6%. That’s what happens when Main Street’s still flush with cash and, more importantly, financing rates sport a three-handle even for borrowers with imperfect credit.
What a difference four years makes. Ostensibly, this is the most pronounced buyer’s market since the financial crisis and yet… well, and yet people aren’t really buying. Existing home sales remain subdued amid prices which, the glaring disparity illustrated so poignantly above aside, are stuck at or near records.
Indeed, Wednesday’s MBA update showed purchase activity slowed for a third week even as rates receded.
As the figure shows, the index now sits at a one-month low after ascending a multi-year high.
“Overall mortgage application volume fell last week despite the slight decline in mortgage rates,” MBA SVP Mike Fratantoni said, adding that he expects “the trends of a softening job market, sticky inflation, elevated home inventories and steady mortgage rates will persist into the new year.”
Commenting on the imbalance between sellers and buyers, Redfin’s Lily Katz offered the same caveat she attached to the prior month’s data: “When sellers outnumber buyers, buyers typically hold the negotiating power [but] it’s only a buyer’s market for those who can afford to buy.”
Patience will be rewarded. Just wait until the boomers start selling en masse.
That is, assuming one wants to live where they did- often in a McMansion in the burbs.
As a seller that resides in the upper leg of the K shaped economy, we just removed the listing for the winter and will try again next spring. We don’t need to sell our mountain vacation home view property, and we can wait and put it back on the vacation rental market. I wonder how many others are in a similar situation.
Where’s it at? The vacation home?
On the side of a mountain looking directly into Rocky Mountain National Park. It is actually the top floor of a two-unit condo.
It is at 8600 feet of elevation which is more than I can take in my advancing age.
You can pipe oxygen into it.
Most of the baby boomers who own homes may not sell their homes enmass if they refinanced into a two or three or four handle mortgage over the past few years when rates were low. I think this is particularly true of those that own smaller homes, ranchers, etc. Not sure where those people are gonna go if they sell.
“Those who can afford to buy”, record high prices, stifling interest rates, insurance costs that seemingly rise – if available. Oh additionally many local governments budgets rely on the high property taxes being taken in their coffers. Any collapse of housing prices, could spell doom for these municipalities.