Houses Are Taking Longer to Sell as US Housing Market Cools

Redfin, the Seattle-based, technology-powered real estate brokerage firm, reported on Tuesday (8-9-22) that the share of US homes that were listed for 30 days or more without going under contract increased by 12.5% year-over-year in July. Or, 61.2% of for-sale homes were on the market for at least 30 days, up from 54.4% in July of 2021.

According to the report, this is the first year-over-year increase in “stale” housing supply since the beginning of the pandemic and close to the largest increase in Redfin’s records, which date back to 2012. In fact, the only time the year-over-year increase was greater was in April 2020, the start of the pandemic when housing sales just about ground to halt (then it was at 13.9%).

The report points out that the uptick in stale inventory is one reason the supply shortage is easing: The total number of US homes for sale was up 4% year over year in July, the biggest increase since mid-2019. That’s largely due to homes staying on the market longer; the number of new listings was down 6%.

Furthermore, the report says that homes staying on the market longer reflects the housing market slowing in response to 5%-plus mortgage rates and a shaky economy. Rates shot up quickly in the first half of 2022, reaching 5.8% in June before dropping slightly to an average of 5.4% in July.

It has taken several months of buyers backing off and sellers rushing to list their homes before the market cools further to culminate in inventory piling up.