Buyers may catch a break from the red-hot housing market soon, according to Realtor.com’s Weekly Housing Trends report released Thursday.
New listings fell 3 percent for the week ending July 3. But with year-over-year increases during 12 of the last 15 weeks, the analysis concluded that the dip was a direct result of the 4th of July holiday.
“While the holiday led to a dip in new listings, growth should bounce back in the weeks ahead as record-high prices continue attracting more homeowners to the market. Combined with recent improvements in the overall trend of inventory and the pace of home sales, the market is showing some early signs of relief from this year’s frenzy,” realtor.com Chief Economist Danielle Hale said.
New listing growth over the past few months has helped slow price growth, giving buyers some room to breathe. And while the number of total active listings was down 39 percent year over year, the decline is shrinking. In fact, according to the analysis, it marked the 13th consecutive week that saw smaller year-over-year declines.
The typical time a home sits on the market is also showing early signs of relief. According to the analysis, time on the market was 23 days faster for the week ending on July 3 compared to the same time last year. While homes are still flying off the shelves, it marked the third consecutive week the year-over-year gap shrunk.
The shrinking gap hints at a market behaving in accordance with the season. During a typical year, as the fall months approach, the average time a home sits on the market gets longer. If 2021 sees normal seasonality, the analysis predicts that the gap will continue to get smaller.
A Redfin report from earlier this month backs realtor.com’s prediction and found that since the summer began, the fast-paced market has been slowing with dips in pending sales and online searches.
According to the July 2 report, Google Trends found that online searches for “Real Estate” fell below 2019 levels for the first time this year, and the number of mortgage purchase applications for the week ending on June 25 fell to the lowest level since May 2020.
But even with these early signs of potential relief, the housing market is still competitive and prices are still high. Per the realtor.com analysis, median listing prices saw a 10.1 percent year-over-year increase, marking the 47th week of consecutive double-digit growth.
“I still wouldn’t call the market buyer-friendly – as it continues to demand quick decisions and top dollar – but it’s finally inching in that direction. If the shift towards more typical seasonality continues, we could see the usual fall break in prices return this year,” Hale said.