TAMPA, Fla. (WFLA) — Price and inventory remain the two factors most affecting homebuyers looking for homes in the current real estate market. While inventory has started to increase, a new study showed that listed homes were going longer without purchase.
Real estate company Redfin said the number of “stale” homes on the market had increased compared to July 2021. Their report on the number of homes sitting on the market, and for how long, said about two thirds of all for-sale homes had sat on the market for more than a month in July 2022.
It was a 54.4% increase compared to the year, as far as time spent listed without purchase. Compared to the previous year, the number of homes themselves was up 12.5%, according to Redfin.
“That’s the first year-over-year increase in ‘stale’ housing supply since the beginning of the pandemic and close to the biggest uptick in Redfin’s records, which go back to 2012,” Redfin reported. “The only time it increased more (13.9% YoY) was in April 2020, when the housing market nearly ground to a halt.”
The company said it’s a “reflection” of a market slowdown as mortgage rates increase and the economy stays “shaky.” Increased inventory, even stale, is one reason Redfin said the supply shortage is easing.
The most recent mortgage rate measure, published Aug. 4 by Freddie Mac, a federally backed mortgage company, showed the rate for a 30-year fixed rate was 4.99%. The rates are updated every Thursday, so that number may fluctuate, but it’s the lowest the rate had dipped since mid-April.
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” Sam Khater, Freddie Mac’s Chief Economist, said. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
Inflation continues to be set, in part, by the housing market’s high prices. The new Consumer Price Index published by the U.S. Bureau of Labor Statistics showed the cost of housing overall increased 5.7% nationally, compared to the year before. As the Federal Reserve continues to push interest rates up in a bid to combat inflation, the housing market is responding.
“People want to know whether we’ve officially shifted from a seller’s market to a buyer’s market. While there’s not a clear line separating those two ideas, homes sitting on the market longer is a point in buyers’ favor,” Redfin Deputy Chief Economist Taylor Marr said. “Buyers can take their time making careful decisions about homes without worrying so much about bidding wars, offering over the asking price and waiving contingencies.”
Currently, Redfin’s data shows homes are staying on the market from more than two weeks to more than two months. The company said that while it’s a bonus for homebuyers who have been fighting high prices and low availability, it’s having a more negative impact on those looking to sell.
“It’s a different story for sellers, who have spent the last two years hearing about their neighbors’ homes getting multiple offers the day they go on sale,” Marr said. “Now they need to price lower and get back to the basics of selling a home, like staging and sprucing up painting, to get buyers’ attention.”
In the meantime, already expensive rental costs aren’t going down either. A recent report by the National Coalition for Low Income Housing found that the average American needed to work at least two full time jobs to afford a place to live.
“The report also calculates the ‘Housing Wage’ a full-time worker must earn to afford a rental home without spending more than 30% of their income on housing costs,” NLIHC said in a statement with the release of the 2022 report. “This year’s national Housing Wage is $25.82 per hour for a modest two-bedroom home at fair market rent and $21.25 per hour for a modest one-bedroom home.”
For Tampa workers, affording even a modest apartment is up to wages per hour. At the state’s minimum wage, workers would need to work 86 hours per week, or make at least $25.90 per hour.
Costs may be starting to come down due to more inventory becoming available, as Redfin reported, but at this stage it isn’t clear if the trend will continue.