For homebuyers sidelined during the record-hot summer market, a September housing market trends report brings encouraging news.
Inventory and home prices continued to stabilize while listing price reductions continued to increase, according to data from Realtor.com. Taken together, these indicators suggest the market is cooling into a new normal that isn’t tilted so heavily in favor of sellers.
By no means did the market flip to a buyer-friendly environment in September, as inventory remains low. However, these baby steps may be enough for some homebuyers to resume their searches.
The number of active listings on a typical day in September was over 646,000 — the highest point in 2021. The number of active listings has increased for five consecutive months since bottoming out at under 492,000 in April.
These figures represent historic lows, however, the year-over-year gap is closing — albeit slowly — according to Realtor.com Senior Economic Research Analyst Sabrina Speianu and Chief Economist Danielle Hale.
“Nationally, the inventory of homes actively for sale in September decreased by 22.2% over the past year, a lower rate of decline compared to the 25.8% drop in August. The smaller decline means the market is heading in an encouraging direction, but the number of homes for sale still remains historically low, and the pace at which the gap is closing has slowed slightly in August, and more notably in September.”
New listings increased year-over-year in 16 of the 50 largest metros. The following metros saw the largest increase:
|Metro||Year-over-year change in new listings|
|Austin-Round Rock, Texas||19.9%|
|Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.||10.7%|
The national median listing price remained unchanged at $380,000 from August to September, representing the fifth consecutive month without an increase.
September marked the second straight month of year-over-year median listing price growth below double digits (8.6%). That’s significant considering the market saw 12 consecutive months of double-digit annual price gains prior to August 2021, including a high of 17.2% in April.
Year-over-year change in median listing price varied greatly from region to region. The Midwest saw a 4.9% decline while the West saw a 9.1% gain.
|Region||Year-over-year change in median listing price|
Zooming further in, median listing prices decreased annually in 22 of the 50 largest metro areas. Milwaukee-Waukesha-West Allis, Wis. saw the largest year-over-year decrease at -14.4%.
Another encouraging sign for homebuyers is the rate of price reductions, which has increased every month since April 2021. In September, 17.9% of listings reduced their price in a typical week, up 1.5 percentage points from last year and nearly on pace with 2016.
For comparison, the price reduction share was under 10% from February to April.
According to Speianu and Hale, this suggests a slight shift in power in favor of buyers, after a year of having next to none.
“In other words, the past two months indicate that sellers are engaging in price adjustments more than last year, potentially allowing for more negotiating room for buyers.”
2021 was a year of housing market extremes that largely favored sellers. However, September housing data suggest the scales are beginning to swing toward balance, which should be welcome news to homebuyers beginning their home search this fall.