In roughly two years during the pandemic housing boom, home prices rose more than 40%. Since then, home prices continued their upward ascent. Capital Economics, for its part, recently said that the national average house price has risen almost 50% since the start of the pandemic. First American yesterday released its home price index report that found “house prices nationally are now 52% higher compared to pre-pandemic levels,” having increased more than 6% in the past year.
But maybe things are set to change. Zillow recently revised its home price forecast upward, but it only sees home values rising 1.9% this year; previously, it expected home prices to increase by 0.9%. Zillow called it “slower than long-term norms but a welcome slowdown for first-time buyers compared to the rapid appreciation seen over the pandemic,” in a report published earlier this week. Still, before the pandemic, it was normal for home prices to appreciate around either 5% or 6% each year, Redfin’s chief economist, Daryl Fairweather, recently noted.
It’s not the first time Zillow’s changed its home price forecast for the year, and probably won’t be the last. But its reasoning has to do with new for-sale listings and mortgage rates.
“With interest rates still elevated, the modest upward revision is mostly the result of a slowdown in the growth of new for-sale listings,” Zillow said. “After rising at an annual pace of 21% in February, the year-over-year increase in new listings eased in March to just 4%, indicating that the market remains quite tight for would-be homebuyers.”
Yesterday afternoon, Federal Reserve Chair Jerome Powell basically said interest rate cuts might not happen this year. “Right now, given the strength of the labor market and progress on inflation so far, it’s appropriate to allow restrictive policy further time to work,” he said, later adding that depending on inflation, the Fed will maintain the current interest rate levels for as long as needed.
That’s not good news for mortgage rates, or really anyone who wants to buy a home. In October last year, mortgage rates reached a more than two-decade high at 8.03%. For some time, they were falling, at one point dipping to 6.61%. But in the past week or so, mortgage rates have been on the rise; the latest reading showed the average 30-year fixed mortgage rate is 7.50%, the highest all year.
“Persistent inflation has diminished any optimism that the Federal Reserve may start to cut rates in June, meaning mortgage rates seem more and more likely to remain ‘higher for longer’ this year,” First American’s chief economist, Mark Fleming, said in an analysis accompanying its home price index.
No one knows what will happen with mortgage rates or new listings, but we know the lock-in effect is real: So as long as mortgage rates are higher than what people are used to, homeowners will choose not to sell. “Many sellers will remain on strike keeping a lid on supply,” Fleming said.
For its part, Zillow said, “It remains to be seen how new listings will fare in April—the Easter holiday falling in March and the fact that February was a leap year are likely clouding the broader picture.” Nevertheless, last year, existing home sales fell to their lowest point in almost 30 years; and Zillow seems to expect them to fall further this year.
“Zillow’s forecast now calls for 4.06 million existing home sales in 2024, slightly below both 2023’s level of 4.09 million and the previous forecast of 4.1 million existing home sales this year,” it said, despite February’s “better than expected sales.”
Meredith Whitney, the one-time “Oracle of Wall Street” who predicted the Great Financial Crisis, doesn’t mince her words. Young single men living at home and playing video games are behind a “crisis of the American male,” she explained in an interview with Fortune.
Her theory about dateless, spiraling young men ends with home prices declining for years, or even decades. Whitney sees home prices falling 30%, but it’s “not the end of the world,” in her mind because of how much prices went up during the pandemic-fueled housing boom. “There’s so much equity stored up in American homes, there’s no collateral damage from that—people then, on paper, are worth less than they thought they were,” Whitney said. “It sounds dramatic, but it’s really not that dramatic just because you’ve had so much massive inflation from the zero interest rate policy.”
As of last year, almost 40% of American homeowners were mortgage-free, meaning they owned their home outright. Although they’d probably be upset to see their net worth fall that much. On the other hand, those who missed the mark and didn’t buy a home before the run-up in prices during the pandemic, might be happy. But let’s go back to the premise: young men (who are actually only part of the equation, and something she’s discussed before).
A lot of young men are single, a study from the Pew Research Center found last year. More than 60% of men under 30 described themselves as unattached in a survey conducted by the Pew Research Center; Whitney referred to this analysis in her thinking. The aforementioned study also found the share of single men in the country looking to date or be in a relationship has declined since 2019, which Whitney alluded to, and emphasized that a portion of young, single men “haven’t had sex in the past year and don’t seem to be bothered by it.” More men are living at home with their parents, and for longer too. A 2016 report from the Pew Research Center found young men were more likely to live at home with mom and dad than a partner.
So where does this all stem from? Mid-2000s video games, in Whitney’s mind. “You have an ability to feel like you’re gaming with a group of friends or community, but you’re really just at home alone,” she said. “And so the socialization of the young American male really started to break down significantly around that time.” According to Whitney, as gaming went up, so did malaise, noting a “despondency and rampant loneliness amongst young men,” in a recent note her advisory group produced. The gaming explosion was driven by technological improvements and the growing popularity of gaming on an iPhone; and it coincided with a poor job market. Combined, these forces have created a cohort of young men who don’t know how to socialize, in her view. “Gaming and social isolation are somewhat of a vicious cycle in which the lack of real social contact creates a sense of social unease, making real social contact much more uncomfortable,” the note states.
Last year, an analysis found that 65% of Americans played video games, and that equated to more than 200 million weekly players, and a 2015 report from the Pew Research Center found that 77% young men play video games—more than any other demographic. She’s said something similar before, only it was about sports betting.
“Unless you’re creating a household, there’s no reason to buy a house,” Whitney said, touching on household formations and birth rates. Before the pandemic, household growth over the previous decade was the lowest ever recorded, per Pew. But another account shows a surge in household growth from 2019 and 2021.
Still, household formation and demand for housing is only one part of the equation. The other has to do with a “silver tsunami,” a metaphor for an aging population, really baby boomers in the housing world. There are varying estimates and predictions regarding the “silver tsunami,” but it all essentially boils down to more supply. Whitney, toward the end of last year, said 51% of people over the age of 50 are set to downsize to smaller homes, citing an AARP report at a conference. That would bring more than 30 million housing units to the market. Separately, a recent Freddie Mac analysis revealed nine million homes were set to come onto the market in the next decade as baby boomers age, but suggested it wasn’t going to really disrupt the housing world.
Either way, she sees more supply and not enough demand in the coming years, which’ll culminate in plummeting home prices—essentially our current situation inverted. Presently, we don’t have enough housing to meet demand (one estimate shows we’re actually missing anywhere between roughly two million and seven million homes), and home prices keep escalating because of it. Whitney doesn’t think we have a housing shortage, not on a national scale. If anything, there’s a shortage of affordable housing, and not enough housing where people actually want to live, she explained. Calling our housing crisis a metropolitan crisis might be better, a housing policy analyst once told Fortune .
Even so, some research has shown single women are buying homes more than single men, so maybe they’d save the housing universe? Not a chance, Whitney said. “How many single women are going to buy four bedroom, three bath homes?” She then brought up the 5 D’s of real estate: diapers, diamonds, divorce, debt, and death. “Without those…I just don’t think it’s going to be a big enough driver.”
Still, if what she’s predicting comes true, it won’t be another housing crash.
Housing isn’t cheap. The average sales price for houses sold in the country was $492,300, as of the fourth quarter of last year. But you can find one for under $20,000 on Amazon—sort of.
Basically, Amazon sells everything, and it’s offering several prefabricated homes, ranging from a 7 x 20 ultratiny house for just under $14,000 to a 19 x 20 one for $19,000 (actually, make that $18,000, since you can apply a $1,000 coupon to the price). Of course, nothing is ever that easy. You’ll need to supply a few things yourself: a tract of land to put the house on, along with a power source and water supply. But the tiny home does come equipped with a toilet, a shower, and some cabinets—door locks too.
The listing isn’t new, but it has come into the spotlight lately after a YouTuber bought one and the video went viral. Between the original YouTube video and its secondary form on Twitter, the video has already racked up almost 14 million views.
The so-called house is shipped in a folded state. Once it arrives, you’ll have to fold out the walls (probably with some help) and ceiling to expand it to its full size. Furniture, of course, is not included.
It’s an unusual sort of place to live. And while it might not stand up to extreme weather, prefab housing has actually been called one of the most environmentally friendly ways to build a house, as it results in less waste and it can be erected quickly. The business of prefabricated homes is a bit more complicated—Veev, “a real estate developer turned tech-enabled homebuilder,” as TechCrunch once described it, that reached unicorn status, shut down last year.
The allure of the tiny home
Still, the tiny home movement has increased in popularity in the last couple of decades, as millennials pushed back against “McMansions” and housing prices soared—more recently being posed as a promising, albeit imperfect solution to the housing crisis. Fortune previously spoke to a 24-year-old who opted for a tiny home in her parents’ backyard and managed to save enough money to buy a $250,000 house; she also gained a TikTok following because of her tiny-housing lifestyle.
Amazon has been selling tiny homes since long before the pandemic. The first noted offering on the site came in 2017, but carried a much steeper price of $36,000—although it did come with heat and air conditioning. Those particular Amazon homes, though, are no longer available.
Amazon isn’t the first retailer to sell homes; Sears sold tens of thousands of houses via a mail-order catalog from 1908 to 1942. The offerings weren’t prefabricated homes, but kits that had most of the materials needed to build a house. Prices started at just $452 for those way back when. More recently, Home Depot began selling tiny homes and accessory dwelling units—one being a 444-square-foot, two-bedroom home that’ll cost you $63,000.
And if it’s not tiny homes per se, it’s builders building smaller homes, as Fortune has previously reported. Last year the median new-home size fell to its lowest point in more than a decade, census data shows.
But all in all, this goes to show that Amazon really is the “everything store.” From books to deodorant, apparel, paper towels, and groceries—you can add tiny homes to the list now.
Meredith Whitney, deemed the “Oracle of Wall Street” for successfully calling the financial crisis, says home prices are likely to fall substantially, and the reasons have to do with habits picked up by young guys.
“You have men staying single longer…and then you have what I call a growing crisis of the young American male…they’re twice as likely to live at home than women. So one out of five young men live at home with their parents, and these aren’t young men going to college and coming home for holiday breaks, these are young, grown men choosing to live at home,” Whitney told CNBC this morning.
The outcome could have profound effects on the housing market, she said.
“I think you’re going to start to see housing prices begin a multi-year/decade decline, just due to supply/demand dynamics,” Whitney said. “So you’ve had a demand, supply imbalance: more demand, less supply. And I think that’s going to invert.” So what that means is supply will then outweigh demand, which is why she sees home prices falling for years.
Whitney’s take is based in part on demographic shifts. The bulk of housing is owned by people and households over the age of 40, she said. But household formations are the lowest they’ve been in more than a century, which translates into a demand problem, she said today.
Yet many experts have predicted that home prices will only continue to go up from here. Mortgage rates reached a two-decade high last year, and people were still buying homes—and because there simply aren’t enough homes, demand outweighs supply, keeping home prices high. Whitney, however, is calling it differently as shifts within the housing world, and apparently among young male adults, occur. It’s not clear what data she is referring to here or in the information above.
Whitney argued that lower-than-ever interest rates “ballooned inflation, and particularly housing inflation,” which has priced so many people out of the market. “If you’re single, the chances that you’re going to be able to afford a home on your own is less likely than if you’re a dual-income family,” Whitney said. Then she goes on to say that homeowners hold much more wealth than non-homeowners.
Whitney has long discussed a “silver tsunami” set to strike the housing market as baby boomers age and their homes are freed up. “You’ll see a supply-demand dynamic shift,” the founder and CEO of Whitney Advisory Group previously said, echoing her claims today.
“Normally you would think as rates go up, home prices would go down, and that hasn’t happened over the last two years,” she said. “I think home prices will normalize because as more inventory, more supply comes on the market, you’ll see a true clearing price that is lower than it is today. So I would say 20% lower than it is today.”
Home prices rose 6% in January; a lot of people think they’ll keep going up. In January, Goldman Sachs predicted home prices will rise 5% this year and 3.7% next year. In March, Capital Economics predicted home prices will rise 5% this year. This month, CoreLogic predicted they’ll increase by 3.1% this year (from February 2024 to February 2025).
Toward the end of last year, Whitney said 51% of people over the age of 50 are set to downsize to smaller homes, citing an AARP report at a conference, and it would bring more than 30 million housing units to the market. More supply, or better said, supply that outweighs demand, would trigger a drop in home prices.
However, this concept of a “silver tsunami” has been widely refuted. A recent analysis from Freddie Mac revealed that the 9 million homes set to come onto the market in the next decade as baby boomers age aren’t going to really disrupt the market. For one reason, younger generations will enter at the same time—meaning housing demand will continue to rise. “Some have warned of a ‘silver tsunami’ as aging boomers look to sell their homes, flooding the market with inventory,” the Freddie Mac report read. “But as this analysis demonstrates, the tsunami is more like a tide, bringing a gradual exit that will mostly be offset by new entrants.”
Additionally, Eric Finnigan, vice president of demographics for John Burns Research and Consulting, recently told Fortune that baby boomers aren’t going to crash the market because they’re powering it. His team found it takes about four deaths to equate to one home listed for sale (because a partner might hold onto it, or it may be passed down to children). The number of homes listed for sale due to deaths is rising, and it will continue to, but “it’s not a deluge,” Finnigan said. “It’s not a tidal wave of homes being listed for sale because of all these dying baby boomers.”
Texas lawmakers are exploring reforms of zoning laws in cities, a move that could unlock the construction of more homes, improve the supply of houses available for sale, and reduce prices in the future.
The Lone Star state had experienced significant activity during the pandemic as workers from other parts of the country flooded the area, increasing demand for homes and pushing up prices.
In February 2020, the median listing price of a home in Texas was about $287,000, according to Federal Reserve Economic Data. That pricing peaked at about $402,500 in the summer of 2022. While values declined in February, they came in at about $360,000—still higher than where they were prior to the pandemic.
Legislators in Texas are contemplating changing zoning laws and land use rules in the state to spark more housing construction which they believe could push supply to meet the demand that, in turn, could ease pressure on prices, according to The Texas Tribune.
Houston State Republican Representative Cody Vasut is one of the lawmakers who has signaled his support for a change in regulations to open up the market for more housebuilding.
“We want to have good policies that encourage development in order to lower prices,” Vasut was quoted as saying by the newspaper. “And the best way to do that is to get the government slightly more out of the way so that the free market takes off and provides a good product at a lower price.”
Newsweek contacted Vasut for comment via email on Friday.
Polls suggest that Texans are amenable to changes that could encourage more building. Eighty-three percent of residents in the state approve policies that will simplify and speed up permits, 70 percent support allowing apartments over garages and in backyards, while 45 percent want to see the reduction of minimum sizes of lots, according to a survey by the Pew Charitable Trust.
Housing economists have argued that part of the reason home prices are high is a lack of enough inventory to meet demand. Some research suggests that the country is 5.5 million homes short of fully meeting demand, according to a 2021 study by the National Association of Realtors.
One way to help improve the gap is changing zoning laws, the group said.
“Incentivize shifts in local zoning and regulatory environments to substantially increase the quantity and density of developable residential space,” their analysis said.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
You need to make almost $76,000 a year to buy a starter home, according to Redfin. The median household income is $74,580, per the Census Bureau, or $84,072, by Redfin’s estimate. Either way, something is wrong.
It all goes back to the pandemic, when the remote-work revolution collided with historically low mortgage rates—it fueled a housing boom, and home prices soared almost 50% since. And that’s not all; mortgage rates followed, at one point reaching a more than two-decade high of just above 8%. They’ve come down since to 6.91%, but are still significantly higher than what they were during the pandemic and years prior. So what have we got? High home prices unaligned with normal incomes and high mortgage rates. Oh, and a shortage of homes.
“Starter homes are roughly half as affordable as they were before the pandemic,” the author of the analysis wrote. “Americans needed to earn $40,465 annually to afford the typical U.S. starter home in February 2020, when the median sale price was $169,000 and the average mortgage rate was about 3.5%.”
The typical starter home sold for $240,000 last month, and the average monthly mortgage payment was $1,896, according to a new analysis from Redfin. The former was up 3.4% and the latter 8.2% from a year earlier. And the income needed to afford said starter home is more than 8% higher than a year ago.
“The pandemic housing-market boom changed the definition of a starter home,” a Redfin senior economist, Elijah de la Campa, said. “A decade ago, many people thought of a starter home as a small three-bedroom single-family house. Now that type of home could cost seven figures, especially in expensive parts of the country.”
Last year, Fortune reported the $300,000 starter home was going extinct. Ali Wolf, housing market research firm Zonda’s chief economist, told Fortune the share of new home projects under $300,000 were declining all across the country. “We’re creating, inadvertently, a renter society not because of choice but because of force,” Wolf said at the time—and that it would fuel a “larger imbalance between the haves and have-nots in the economy.” We know right now renting is considered cheaper than buying and will be for years, by some estimates.
Wolf later told Fortune, Zonda adjusted what it considers to be entry-level to homes under $400,000. Homebuilders have even resorted to building smaller homes, as Fortune has reported, and it still isn’t enough.
“Today’s most affordable homes are still hard for the average American to afford, let alone the average first-time buyer who tends to put less money down in exchange for higher monthly payments,” Redfin’s de la Campa said. “Rising prices and mortgage rates are pushing buyers who earn more than the median income to buy starter homes, and often pushing buyers who earn less money out of the market.”
However, starter homes are technically more affordable than they were last fall, but that’s simply because mortgage rates aren’t at 8% anymore, so monthly payments are slightly lower. Still, there are places across the country where it feels nearly impossible to even afford a starter home.
The income needed to buy a starter home in California is the highest. “A homebuyer needs to earn roughly $319,000 to buy the median-priced starter home in San Jose, $306,000 in San Francisco, and $247,000 in Anaheim,” the analysis read; an 11.7%, 2.4%, and 12.1% annual increase, respectively.
More so, to afford a normal starter home in Oakland, you need to make $209,096, or $216,189 in San Diego, or $177,886 in Los Angeles. For some context, California’s median household income is $91,905.
Leaving California, you need to make $118,201 to afford a starter home in Austin; $158,764 in Boston; and $162,845 in New York, according to Redfin.
And the needed income is the lowest in the Rust Belt—in Detroit, you only need to make $22,000, or $32,000 in Pittsburgh, and $37,000 in St. Louis. But consider this, the income needed to afford a starter home only declined in one of the 50 most populous metropolitan areas: Pittsburgh. It rose everywhere else.
Barbara Corcoran has said it before, and she’ll probably say it again: When mortgage rates fall, home prices will rise. “If rates go down just another percentage point…prices are going to go through the roof,” the self-made real estate millionaire and Shark Tank star told Fox Business yesterday.
The average 30-year fixed mortgage rate is 6.91%. It’s much lower than the 8% mortgage rates we saw in October last year, but it’s a far cry from the historic lows experienced throughout the pandemic. Still, in her view, 6% seems to be the “magic number,” and once mortgage rates dip to that point, sidelined buyers will come rushing into the housing market, Corcoran said.
“Everybody is going to charge the market, and so if you wait for interest rates to come down by another point, I don’t think you’ll gain,” she said. “I think you’ll wind up paying more, because I wouldn’t be surprised if real estate went up by another 8% or 10% if interest rates come down another point.”
On an earlier occasion, Corcoran said prices would “explode” the minute interest rates fall; and on another, she said they could rise 10% to 15%. After leaving interest rates unchanged several meetings in a row, Federal Reserve officials still signaled three cuts this year. If that does occur, mortgage rates will follow.
Home prices rose substantially during the pandemic-fueled housing boom. By one estimate, the national average house price has risen almost 50% since the start of the pandemic. Not to mention, home prices rose another 6% in January. The average sales price of houses sold in the country was $492,300 as of the fourth quarter last year. It was just $384,600 in the fourth quarter of 2019, before the pandemic began. It’s hard to imagine what another 10% increase would look like given how unaffordable the housing market already is: one in which buyers need to make $30,000 more than they currently do to buy a home, and it’s cheaper to rent than buy and will be for years.
Home prices keep rising because we’re missing anywhere between roughly 2 and 7 million homes; everyone knows it, including the Biden administration and the Fed Chair. Interestingly enough, some have gone as far as to suggest that home prices could fall in the aftermath of the National Association of Realtors’ groundbreaking $418 million settlement, which above all made it so commissions could no longer be baked into listings. Corcoran doesn’t see that happening.
“The cost of housing, I believe, will go up because it has been going up for the last five years, despite the dire state of the shortage of houses,” Corcoran said. “There’s not enough houses to go around.”
Even if sellers are paying a smaller commission, “they want the most money they can get, so they’re going to take any savings and put it in their pocket,” she explained. Additionally, on the topic of the NAR settlement, Corcoran said commissions have always been negotiable; what’ll really change is that everything will be done in writing—which is a good thing. “I think that was needed for clarity,” she said. And of course, Corcoran was a broker herself; she started her own brokerage firm, the Corcoran Group, in the early 1970s and eventually sold it for $66 million.
“But the confusing part is sellers’ and buyers’ brokers are not allowed to look up commissions anymore on the MLS,” Corcoran continued, referring to the Multiple Listing Service. “There’s no status as to whether I’ll pay you as a broker, or I won’t pay you as a broker. So it’s a guessing game.”
More bad news for anyone who wants to ever own a home: Home prices just went up again. The S&P CoreLogic Case-Shiller U.S. National Home Price index rose 6% in January, data released today shows; that’s up from a 5.6% increase in the previous month, setting the fastest annual gain since 2022. “On a seasonal adjusted basis, home prices have continued to break through previous all-time highs set last year,” Brian Luke, head of commodities for S&P Dow Jones Indices, said in an accompanying statement.
Renting isn’t necessarily affordable either, but it is cheaper than buying, and could be for years to come, according to Capital Economics. That should show just how unaffordable buying has become in a housing market beset by skyhigh home prices and mortgage rates that more than doubled in a short period of time. Still, “as mortgage rates fall, we think the difference between the cost of buying and renting will narrow from the current all-time highs,” Capital Economics’ property economist, Thomas Ryan, wrote in a new housing market update. “But even by 2026, renting will remain by far the more cost-effective option.”
Currently, the average sales price for homes sold in the country is $492,300; the average 30-year fixed mortgage rate is 6.91%; and the median rent for all bedrooms and property types is $2,055. Conversely, in the 2010s, the monthly cost of buying and renting were pretty close, but that changed a few years ago, when the cost of buying a home soared with the pandemic housing boom, Ryan wrote. The monthly payment for an average home with an 80% loan-to-value ratio mortgage is about $2,700, and that’s $970, or 56% higher, than the typical rent, according to Capital Economics. “That marks a historically large premium,” he wrote. “And in realty, the gap could be even larger.”
Capital Economics recently said the national average house price has risen almost 50% since the start of the pandemic. And in this note, Ryan wrote that rent as a share of disposable income among 25 to 34 year olds was 40.5% as of the fourth quarter of last year, dipping from a peak of 41.6%. So clearly, both rents and home prices are costly.
Still, despite the fact that the firm expects mortgage rates to fall from here, and borrowing costs to lessen, renting will still be cheaper. For one, Capital Economics doesn’t see mortgage rates falling below 6% by the end of 2026, and at the same time, it expects home prices to continue their upward trend, while rents stay muted. “Therefore, we’re forecasting that the additional monthly cost of buying a home rather than renting will still be $570 (or 47%) by end-2026,” Ryan wrote.
Unsurprisingly, it’s supply that is keeping rents subdued, and supply that is pushing home prices up. The only difference is the type of supply, multifamily versus single-family. And it’s apartments that are considered oversupplied (if there’s such a thing) and single-family homes that are undersupplied.
And of course, buying and renting aren’t synonymous; buying can help you build wealth, as Ryan pointed out. Capital Economics isn’t the only one to identify renting as cheaper than buying. Realtor.com’s newly released monthly rental report found renting a starter home is a more affordable option than buying one in all 50 of the largest metropolitan areas in the country. “The monthly cost of buying a starter home in February 2024 was $1,027 more or 60.1% higher than the cost of renting,” the report read. Separately, Capital Economics predicts home prices will rise 5% this year, and 3% next year.
Only time will tell where they all go from here, but we do know that going from renting to owning is becoming harder and harder.
The housing world’s pivotal spring season has arrived. Home sales bloom in the spring, at least normally they do, but this year’s season isn’t a typical one. It will be more like a mini-spring season consisting of high mortgage rates, higher home prices, and just a trickle of inventory, as Fortune previously reported.
But there is one week that will be the best time to sell all year, according to Realtor.com. “The week of April 14–20 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year,” Realtor.com’s economic research analyst, Hannah Jones, wrote in a recent report. There are five reasons why, but not one is that it will have the highest prices of the year. Still, “while it does not have the highest price or the lowest time on the market of the year, this week offers higher-than-average prices and lower-than-average time on the market while also offering a higher-than-average number of buyers—measured as viewers per listing,” she added.
First, homes during that week have historically reached prices 1.1% higher than the typical week throughout the year, and are normally 10.4% higher than the beginning of the year, Jones wrote. And if it follows last year’s pattern, the median listing price could be $7,400 above the typical week and $34,000 more than at the start of the year.
Second, in previous years, the selected week had 18.4% more views per listing than the average week. Last year, it even had 22.8% more views per listing than typically. That leads us to the third reason, which “thanks to above-average demand, homes sell more quickly during this week,” Jones wrote. Historically, homes sold 17% (or nine days) faster the week of April 14 than the average week.
Now to the fourth reason: less competition. Active inventory is higher than last year, but it’s still substantially lower than pre-pandemic levels, which means there are fewer sellers selling. The final reason? Fewer price reductions. Roughly 24.6% fewer homes had a price reduction during the chosen week in previous years. “Price reductions tend to peak in the fall as sellers left on the market after the summer rush try to attract attention,” Jones wrote. “Price reductions tend to be the lowest from late winter into spring as buyer activity ramps up.”
It’s important to note that April 14–20 is considered the best week to sell on a national basis, and that can change when considering an individual metropolitan area, which Realtor.com breaks down. Additionally, Realtor.com chose the third week in April as the best time to sell after considering seasonal trends and housing metrics from the last five years, excluding 2020, and calculating a best time to list scores for each week of the year; mortgage rates aren’t one of those metrics.
Nevertheless, there’s no question this year’s spring conditions will be slightly better than last year’s for sellers. Last year, existing-home sales fell to their lowest point in almost three decades, partly because higher mortgage rates stopped or delayed homeowners from selling their homes. Supply was already tight, and this only made it worse and essentially kept home prices high after they skyrocketed during the pandemic. Mortgage rates have fallen from their recent peak, and the average 30-year fixed rate is sitting at 6.92%. So buyer and seller activity has picked up, Jones explained, and we’re taking “baby steps toward affordability.”