Home prices are sliding, and more properties are flooding the market, especially in the South. The housing frenzy of recent years has given way to a marked slowdown, with homes sitting unsold for an average of 60 days—the longest in five years. At the root of this shift are soaring mortgage rates, making homeownership a tougher climb for many.
⏰ The South has the most homes for sale, and homes are lingering for the longest time in five years before being snapped up by buyers.
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— Realtor.com Economics (@RDC_Economics) December 11, 2024
Nationwide, home prices rose just 3.4% year-over-year in October 2024, a dramatic deceleration compared to previous years, according to CoreLogic. While prices remain up slightly, the pace of growth has slowed significantly, reflecting a market weighed down by high borrowing costs. At around 7%, the average 30-year mortgage rate has drastically increased monthly payments, sidelining many would-be buyers.
The South is feeling this strain acutely. With the highest inventory of homes for sale in the country, this region paints a clear picture of a cautious buyer pool. Homes are lingering on the market, with prospective buyers waiting for better deals or improved mortgage rates before taking the plunge.
This hesitation stems from financial realities. A 7% mortgage rate is double what buyers faced just a few years ago. For many, the additional cost is untenable, turning what was once a stretch into a dream deferred. The effects ripple beyond individual households, touching the entire real estate ecosystem. Construction jobs, real estate services, and related industries are all feeling the pinch of reduced homebuying activity.
The contrast with past market cycles is striking. Historically, falling home prices paired with robust inventories might signal a buyer’s market, spurring activity. But today’s environment is unique. Even with abundant listings, affordability challenges outweigh the usual lure of deals.
One of the most telling signs of this shift is the growing time homes spend on the market. A stark increase from just 30 days to 60 days in the South highlights how buyer behavior has changed. The pace of purchases has slowed, forcing sellers to adjust their expectations and, in many cases, their prices.
Sources:
https://www.zillow.com/research/market-reports-2024/
https://www.realtor.com/news/trends/housing-market-december-2024/
https://www.corelogic.com/intelligence/us-home-price-insights-december-2024/
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