High Interest Rates Continue to Discourage Would-Be Sellers From Listing Their Properties for Sale
September 2023 saw a Slight Year-Over-Year Decrease in Median Days on Market, Signaling That we Remain in a Current Seller’s Market Environment
Student Loan Payments Beginning in October are Expected to Put Additional Affordability Pressure on Potential Buyers and Will Hamper Future Demand
HouseCanary, Inc. (“HouseCanary”), a national brokerage known for its real estate valuation accuracy, today released its September Market Pulse report, which finds that low market activity continues as mortgage rates reach new highs. In addition, closed prices continued to achieve positive year-over-year growth, while list prices appear to have peaked in June.
In early September, the year-over-year inflation observed pointed towards another round of rate hikes. As total inventory, net new listings and new listing volume all continue to show year-over-year decreases, further hikes were likely to stall market activity and continue the slump seen over the past year. The Federal Reserve decided to pause hikes at the latest meeting, but signaled one more rate hike on the horizon. Additionally, student loan payments beginning in October are expected to put further affordability pressure on potential buyers, likely resulting in downward pressure on demand.
Jeremy Sicklick, Co-Founder and Chief Executive Officer of HouseCanary, commented:
“In September, the housing market exhibited a persistent trend of low activity with mortgage rates reaching new highs. Our data reveals a decrease in net new listings by 20.0% compared to last year, coupled with a 12.4% drop in properties going under contract. This subdued market environment, characterized by a 5% reduction in median days on market, signals a current seller's market, prompting potential buyers to continue to turn towards the rental market due to high interest rates. Furthermore, anticipated student loan payments beginning in October are expected to put additional downward pressure on demand from would-be buyers facing high purchase prices, high interest rates and less discretionary income."
Key Takeaways:
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For the month of September 2023, 216,690 net new listings were placed on the market, and 248,316 properties went under contract. This represents a decrease of 20.0% and 12.4%, respectively, versus September 2022.
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The decrease in net new listings was driven by a 19.3% decrease in new listing volume as well as a 16.7% decrease in removals compared to September 2022.
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Median days on market stood at 38, down 5.0% from the prior year at 40 days on market.
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The sale-to-list-price ratio stands at 99.0%, which is well above the lowest value observed in January 2023.
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Price cuts are down 26.1% compared to the same time last year.
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Total inventory is down 9.6% from the same period in 2022, and down 8.7% from 2021. Inventory remains very low from a historical perspective.
- Total single-family rental inventory is up 34.1% from the same period in 2022, and up 158.1% from 2021.
Methodology
The Market Pulse is an ongoing review of proprietary data and insights from HouseCanary’s nationwide platform, covering 22 listing-derived metrics and comparing data between September 2022 and September 2023.
About HouseCanary
Founded in 2013, national real estate brokerage HouseCanary empowers consumers, financial institutions, investors, and mortgage lenders, with industry-leading services including valuations, forecasts, and transactions. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com.
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Contacts
Longacre Square Partners
Casie Connolly / Anna Price
housecanary@longacresquare.com
