The spring housing market is looking quite promising as new listings rose by more than 10% year-over-year, and the inventory saw significant improvement.
A new report by Redfin found that the number of listings of homes for sale rose 13% during the four weeks ending February 25, the biggest increase recorded in nearly three years. Additionally, active listings remained flat, marking the first time in nine months that the total number of homes for sale has not declined.
Total inventory in the housing market has also improved, hitting a record that has not been seen since 2020, per a separate report by Realtor.com. However, inventory still remains 39.6% lower compared to typical levels before the COVID-19 pandemic.
"The spring housing market could shape up to provide home shoppers with a more plentiful supply of less expensive homes than last year," Realtor.com economic data manager Sabrina Speianu said in the report. "Home shoppers will have more choice, and in particular more choice of lower-priced homes."
Does This Mean the Housing Market Will See More Activity?
Whether the housing market heats up remains to be seen. A number of factors will affect activity in the housing industry. Mortgage rates, for example, have been on a roller coaster ride since the fall of 2023.
In October last year, the rates for 30-year fixed loans hit 7.79%. The rates abruptly fell in December and the early weeks of the new year to 6.6% before shooting back up to 6.94% in the week ending February 28, according to data from Freddie Mac.
In line with the current mortgage rates, the typical homebuyer is still facing mortgage payments of $2,671. That is just $47 shy of last October's record high.
"Consistently strong economic and labor market conditions and an uneven decline in inflation has pushed the Federal Reserve Board into a wait-and-see approach to determine the best timing for future rate cuts, a factor driving increased mortgage rates in late February," Speianu noted.
In addition to rising mortgage rates, the price of a median home rose about 1.5% to $415,500 in February from January's $409,500, per Realtor.
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