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Sluggish Net New Listings Signal That The Lock-In Effect Isn’t Over | Black Kite Express

In January, the housing market saw a 17.5 percent decline in net new listings and a 2 percent decline in contract signings, driven by fluctuations in mortgage rates, according to HouseCanary. Despite an increase in total inventory compared to 2022 and 2023, the market is still behind historical inventory averages as sellers avoid entering a higher rate environment.

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Mortgage rates wreaked havoc on the market in January, as buyers and sellers continued to put their real estate plans on hold in hopes of upcoming interest rate cuts. Consumer nervousness resulted in a 17.5 percent decline in net new homes for sale and a 2 percent decline in contract signings compared to January 2023, according to home valuation platform HouseCanary. on Monday.

Home sellers placed 131,050 net new listings (that is, new listings minus deleted listings) on the market in January, up from 158,192 net new listings the year before. Meanwhile, homebuyers signed 186,284 contracts during the month, up from 190,045 in January 2023.

“In December, we saw a slight increase in listings year-over-year as potential buyers and sellers became a little more comfortable with slightly reduced interest rates. However, these trends did not continue into the new year,” the report reads. “New listings and contract volume are trending toward multi-year seasonal lows, both declining compared to January 2023.”

The decline in net new listings occurred across the market; However, sellers of homes within the $200,000 to $400,000 price range had the biggest decline with an annual drop of -24.7 percent.

Net new listings of homes valued between $0 and $200,000 (-18.4 percent), homes valued between $400,000 and $600,000 (-16.5 percent) and $600,000 to $1 million (-6, 5 percent) also suffered a drop. The only price range that saw an increase in net new sales was homes priced at $1 million or more (+5.8 percent).

On the homebuyer side, contract signings only decreased for homes valued between $0 and $200,000 (-4.6 percent) and between $200,000 and $400,000 (-6 percent). Meanwhile, buyer activity at the top end of the market remained strong, with contract signings for homes priced at $400,000 to $600,000 (unchanged at 0 percent), $600,000 to $1 million (+4.5 percent ) and $1 million or more (+11.7 percent). ), surpassing January 2023.

Despite declines in net new listings and contract signings, HouseCanary said current total inventory levels were up 7.9 percent from 2023 and 24.8 percent from 2022. However, at the pace of sales Currently, the US has 4.8 months of inventory, which still places the market. directly in the hands of the sellers.

Looking ahead, HouseCanary said the Fed’s current strategy does not lend itself to breaking the year-long mortgage lockup effect. Although real estate leaders expect rates to fall to the 5 percent range, HouseCanary said rates will likely continue to hover between 6.5 percent and 7 percent for most of the year.

“While inventory increased compared to January of last year, it remains very low from a historical perspective,” the report reads. “With the Federal Reserve signaling that rates will remain at current levels while inflation remains above its 2 percent target and dashing hopes of a rate cut in March, there remains little incentive for buyers and potential sellers to abandon their current mortgage rates.”

Email Marian McPherson

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