Frankly, it feels like the housing market is contracting a bit now in November. After the hurricanes, we got hit with spiking mortgage rates and then the election. We saw a little rebound in the new listings rate after the election, but it was actually less of a rebound than I anticipated. A few more sellers emerged, but my gut says that many are done for the season and maybe will try again next spring.
Home sales
We counted 53,000 new contracts pending for single-family homes last week, with another 11,000 condo sales. That’s a bounce up of almost 3% for the week after the election pause.
The recent average weekly single-family home sales is down to 56,000 newly pending single-family home sales per week. Home sales are averaging almost 10% more than last year but October of 2023 was really weak for transaction volume.
We are still forecasting slight growth overall in home sales in 2025 — probably just 5% more than in 2024. In the chart below, I’ve used a four-week rolling average of home sales to smooth out the weekly noise, but you can see that sales are running just a bit ahead of last year. There’s not a ton of growth here: 52,000 new listings in a week and 53,000 sales.
Home prices
The median price of new sales started last week was $380,000 again — no change from the week before. So new listings bounced up, inventory ticked up, the sales rate improved but the price stayed unchanged. Home prices by this measure are about 4% more than last year at this time.
Price reductions
Below is a view of list-price reductions I don’t think I’ve shared before. Normally we talk about the percent of homes on the market that have taken a price cut. That percentage has peaked for the year and is now 38.8% of the homes on the market. But rather than the percent of listings, let’s look at how much those listings need to cut price and see if that gives us any new information.
Currently home sellers taking a price cut have dropped just over $15,000 from the original list price on average. If you think about the median priced home in the US, which is $430,000 now, that’s 3.5% price cut.
In this chart we have the absolute level of price cuts to watch and the change in the amount. And right now, fewer dollars are being cut and it’s seeing a seasonal declining ahead of the last two years. This is another signal for home-price stability as we look forward to the housing market of 2025.
Mike Simonsen will be a featured speaker at the Housing Economic Summit in Dallas on February 26. Find out more here.