Home transaction volume tanked in 2023 as buyers and sellers became dissatisfied with the state of the real estate market. Would-be buyers became renters as mortgage rates surged to levels not seen since the turn of the century, hurting home demand and frustrating sellers.
But in the first month of 2024, those frustrations have started to fade into the background.
The real estate market may be in Goldilocks territory after an ugly year
Property prices rose by 1.4% year-over-year to $410,000 in January, according to a report from Realtor.com published on February 1. That steady growth threaded the needle in a departure from last year, as it seems to be neither unmanageable for buyers nor unacceptable for sellers.
To that point, the number of US homes listed jumped by 7.9%, Realtor.com found. New listings rose across the US, including 20% spikes in large cities like Denver, Seattle, and Miami.
An increase in housing supply is welcome news for buyers, considering the headaches that stemmed from the nation’s long-standing home shortage. That development seemed to spur more transactions, as the listings site noted that the time houses spent on the market was almost two weeks shorter than in January 2019, and four days shorter than last year.
“We are seeing increases in inventory and, importantly, gains in newly listed homes for sale indicating sellers are more ready to make moves,” Danielle Hale, the chief economist at Realtor.com, said in a statement for the report. She added, “time on market fell, signaling that buyers are ready to make offers on these new options.”
More properties to choose from and lower borrowing costs may lead to a modest resurgence in the housing market. Mortgage rates are down over one percentage point from their fall peak, though they’re still much higher than they were throughout the 2010s.
However, the picture isn’t all rosy for buyers. Home prices and mortgage rates are still above where they were last January, which means the monthly payment for a typical home with a 20% down payment is up 5.4%, or roughly $108, in the past 12 months — not counting tax and insurance costs. The silver lining is that growth is slowing, as costs in December were up 6.1%.
10 cities where prices are down
The outlook for buyers is finally improving, especially in cities where home prices are falling. Realtor.com tracks property statistics in the 50 largest real estate markets in the US and found that in January, 10 metropolitan areas saw their median listing price decline from 2023.
Below are those 10 cities with sliding property prices, along with the median home price, year-over-year growth for median home prices nominally and on a per-square-foot basis, the share of homes with reduced prices, and the growth of the share of homes with lower prices.