New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.

The supply of American homes posted a record increase as more residential property lingers on the market, according to a new analysis released Thursday by Redfin.

The total number of homes on the market increased 15 percent year over year during the four-week period ending Dec. 4 — the biggest uptick since at least 2015 — while new listings declined by 20 percent, indicating that homes are sitting on the market for longer as buyers wait for mortgage rates to decline, according to Redfin.

Rates have in fact declined slightly from their highs of over 7 percent in early November — hitting 6.33 percent this week, according to Redfin — causing Redfin’s Homebuyer Demand Index to increase 5 percent in the past week.

“This week has been relatively calm and quiet as we approach the end of one of the most volatile years in housing history,” Redfin Deputy Chief Economist Taylor Marr said in a statement. “But it’s not over yet. Next Tuesday’s inflation report is the 500-pound gorilla in the room, and the Fed’s press conference the next day will bring us much more clarity on how soon and how quickly we can expect mortgage rates to come down in the new year.”

Mortgage rates will play the biggest role in determining how the market will play out in 2023, with prices not expected to drop significantly, Marr said.

“Since we expect only a small decline in prices next year, mortgage rates will dictate housing affordability, and as a result, demand and sales, in 2023,” he said. “If rates continue declining, more buyers may wade back into the market, as they’ll have lower monthly payments.”

Home sale prices did fall during the four-week period ending Dec. 4 in 11 of the 50 most populated metropolitan areas in the U.S., mostly in California, according to Redfin. Prices fell 7.8 percent annually in San Francisco, 3.6 percent in San Jose and 2.2 percent in Los Angeles.

They also declined less than 1 percent in Phoenix — a small decline, but one that marks the first time they’ve declined in Phoenix since at least 2015, according to Redfin.

Email Ben Verde

Redfin
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×