New
listings
climbed
during
the
past
week
and
there
are
now
72,000
more
single-family
homes
on
the
market.
It
appeared
that
new
listings
might
be
on
the
decline
already,
but
the
pace
picked
up
a
tad
this
week,
which
is
encouraging.
More
people
coming
off
the
sidelines
to
sell
their
homes
is
a
healthy
signal
for
the
market. 

Of
course,
we
have
to
keep
watching
the
sales
rate
too.
No
one
wants
a
scenario
in
which
there’s
a
flood
of
sellers
but
no
buyers.
So,
it
was
encouraging
that
new

pending
sales
ticked
up
a
bit
this
week
after
having
declined
for
several
weeks
in
a
row.

Altos
Research
tracks
every
home
for
sale
in
the
country
each
week.
The
data
so
often
defies
expectations
or
changes
quickly.
We
track
all
the
pricing,
supply
and
demand,
sales,
and
all
the
changes
in
the
data
so
you
can
understand
immediately
as
it
happens.
Let’s
look
at
the
details
of
the
U.S.
real
estate
market
at
the
end
of
May
2024. 

Inventory

There
are
595,000
single-family
homes
on
the
market
now.
That’s
up
almost
3%
for
the
week
and
represents
37%
more
homes
unsold
on
the
market
now
than
at
this
time
last
year.

Every
state
in
the
country
now
has
more
unsold
inventory
than
a
year
ago.
Some
states
like

New
York
have
only
a
fraction
more
unsold
homes
now
than
last
year
while
other
states
like

Florida
have
65%
more
homes
unsold.
But,
basically,
inventory
is
still
climbing
everywhere
as

mortgage
rates
are
still
north
of
7%.
Higher
rates
create
more
inventory.

Rates
have
eased
down
in
the
past
few
weeks
and
may
soon
sneak
back
below
7%.
We’ve
had
an
ongoing
trend
of
expanding
inventory
—
these
are
the
unsold
homes
on
the
market
—
that’s
been
building
all
year.
And
this
trend
will
continue
until
mortgage
rates
drop
significantly. 

With
nearly
600,000
homes
on
the
market,
that’s
more
than
at
anytime
since
the
start
of
the
COVID-19
pandemic
in
2020.
In
a
few
weeks
—
probably
early
July
—
inventory
is
likely
to
surpass
2020
levels.
Inventory
will
peak
in
late
summer
and
is
expected
to
end
2024
with
about
620,000
single-family
homes
on
the
market,
which
would
be
about
20%
more
than
the
year
prior.

In
the
accompanying
video,
the
inventory
chart
shows
a
dark
red
line,
which
illustrates
that
unsold
inventory
in
2024
is
consistently
trending
higher.
And
you
can
see
how
the
number
is
set
to
cross
over
the
gray
line
(2020)
by
July.
You
can
also
see
the
light
red
line
from
2022
when
rates
were
first
skyrocketing.
That’s
when
inventory
started
climbing
up
from
the
record-low
levels
during
the
pandemic.
Inventory
in
2022
was
building
much
more
quickly
than
it
is
now.
Rates
were
jumping
and
so
was
inventory.

There
might
be
a
chance
that
mortgage
rates
finally
start
to
meaningfully
recede
in
the
second
half
of
the
year.
If
mortgage
rates
fall
quickly,
you’ll
see
the
slope
of
this
year’s
inventory
line
level
off
as
homebuyer
demand
picks
up
due
to
increased
affordability.
Expect
that
demand
to
be
noticeable
if
the
30-year
fixed
rate
gets
close
to
6.5%.

New
listings

There
were
72,000
new
listings
this
week.
That’s
up
several
percentage
points
from
last
week
and
is
the
most
new
listings
of
any
week
this
year.
This
is
good
because
it’s
a
reversal
from
what
was

assumed
last
week.

The
volume
of
new
sellers
had
been
inching
down
for
three
weeks
and
it
looked
like
the
new-listings
rate
had
passed
its
peak
for
the
year.
But
this
week,
it
jumped.
As
previously
mentioned,
any
signs
of
rising
seller
volume
is
helpful
to
this
market.
In
most
years,
new
listings
volume
peaks
in
the
second
quarter,
so
hopefully
we
get
a
little
more
runway
before
the
volume
tapers
off
in
the
latter
half
of
2024.

There
were
72,000
new
listings
unsold
and
another
18,000
listings
that
are
already
under
contract
(i.e.,
immediate
sales).
That
equates
to
90,000
new
sellers
this
week,
or
10%
more
than
a
year
ago.

In
2022,
however,
there
were
108,000
new
listings
during
the
last
week
of
May
—
20%
more
than
today.
This
is
important
context
because
it
helps
to
show
that
total
home
sales
will
necessarily
be
capped.
There
just
aren’t
enough
sellers
yet.
But
seller
volume
is
growing
and
any
growth
in
the
market
is
good
in
relation
to
the
incredibly
restricted
pace
we’ve
been
on. 

The
three
most
populous
states
—

Texas,
Florida
and

California
—
each
have
about
20%
more
new
listings
this
week
than
a
year
ago.
The
South
has
been
leading
inventory
growth
this
year,
but
California
is
picking
up
pretty
quickly.
That’s
something
to
keep
an
eye
on.

Pending
sales

There
are
404,000
single-family
homes
in
contract
now.
That’s
up
almost
1%
from
last
week
and
about
1.25%
more
on
a
year-over-year
basis.
A
few
thousand
more
homes
are
under
contract
to
close
in
June
than
there
were
a
year
ago.

There
were
also
68,000
new
contracts
started
this
week.
That’s
up
almost
1%
from
last
week
and
4%
more
than
a
year
ago.
It’s
nice
to
see
the
number
of
new
contracts
tick
up,
although
it
looks
like
April
might
have
been
the
2024
peak
for
that
measurement
of
home
sales.
The
peak
for
the
year
so
far
was
a
few
weeks
ago,
when
there
were
78,000
new
contracts
started.

There
will
be
a
couple
more
weeks
in
June
with
potential
growth
in
contracts
before
the
market
recedes
after
the
July
4
holiday.
There’s
usually
a
spike
in
offers
that
happens
before
Independence
Day.

In
the
video
above,
the
pending
sales
chart
has
bars
that
each
represent
a
week.
The
higher
the
bar,
the
more
homes
that
are
going
under
contract.
These
404,000
pending
single-family
home
sales
will
close
mostly
in
June.
The
lighter
portion
of
each
bar
represents
the
new
contracts
started
that
week,
and
a
dotted
line
has
been
added
to
show
where
the
market
is
compared
to
last
year
at
this
time.
Right
now,
there’s
just
a
tiny
bit
of
growth. 

Price
reductions

Today,
34.8%
of
homes
on
the
market
include
a
price
cut.
That’s
up
40
basis
points
from
last
week
and
is
about
450
basis
points
above
where
it
was
at
the
end
of
May
2023.
Not
only
is
the
share
of
homes
with
price
cuts
elevated
compared
to
one
year
ago,
but
more
price
cuts
are
happening
each
week
than
last
year.

As
inventory
has
grown
and
demand
has
slowed
due
to
higher
mortgage
rates,
the
houses
sitting
on
the
market
need
to
cut
their
asking
prices.
It’s
normal
for
there
to
be
price
cuts
in
every
market.
But
now
that
more
than
one-third
of
listings
have
cut
their
prices
—
and
as
this
trend
line
approaches
40%
—
it’s
really
indicative
of
an
ongoing
slowdown
in
demand.
By
July,
it
is
possible
that
more
than
40%
of
the
homes
on
the
market
will
have
price
cuts.
That
would
be
a
bearish
indicator
for
future
sales
prices.

In
the
accompanying
chart,
if
you
follow
the
slope
of
the
dark
red
line
up
for
another
month
or
two,
you’ll
see
how
the
market
may
approach
40%.
These
are
leading
indicators
for
sales
that
will
happen
in
the
future. 

And
mortgage
rates
can
change
this
trajectory.
Price
cuts
are
more
prevalent
this
spring
because
rates
have
stayed
higher
for
longer.
But
if
rates
drop
substantially,
you’ll
see
a
subsequent
pickup
in
homebuyer
demand
that
shows
up
in
this
stat
through
fewer
price
cuts.
Keep
a
lookout.

Home
prices

Since
price
reductions
are
a
leading
indicator
of
future
sales
prices,
Altos
Research
is
watching
price
signals
to
see
if
sales
prices
are
showing
any
weakness.
While
we’ve
been
sharing
for
a
few
weeks
that
it
looks
like
there’s
weakness
in
future
sales
prices,
most
of
the
home
price
metrics
do
not
yet
show
receding
growth.
Most
indicators
are
still
showing
3%
to
4%
growth
over
last
year.

The
median
price
of
all
U.S.
single-family
homes
on
the
market
today
is
$454,000.
That’s
up
almost
1%
from
last
week
and
is
slightly
higher
than
in
late
May
2023.

The
median
price
of
the
homes
in
contract
is
$400,000,
which
is
almost
4%
more
than
a
year
ago.
Take
a
look
at
the
pending
sales
chart
and
the
dark
line,
which
shows
all
of
the
homes
that
are
in
escrow
right
now.
These
are
sales
that
will
close
mostly
in
June.
So,
we
can
see
that
they’re
almost
4%
more
expensive
than
at
this
time
last
year.

You’ll
also
see
in
the
chart
how
home
sales
cluster
around
the
big
round
numbers.
The
median
price
of
pending
sales
has
been
basically
at
$400K
for
the
past
eight
weeks.
You
can
see
a
long
stretch
at
$375K
in
2022
(the
light
red
line).
Since
sale
prices
cluster
around
these
numbers,
and
the
median
is
the
middle
for
all
them,
it’s
likely
that
the
median
stays
at
the
same
number
for
several
weeks
in
a
row.

You
can
also
see
in
this
chart
how
we’re
probably
at
peak
pricing
for
the
year.
Starting
in
June
or
July,
prices
will
start
to
tick
down
during
the
second
half
of
2024.
The
chart
for
pending
home
sales
prices
is
worth
watching
because
this
is
the
earliest
proxy
for
sales
that
will
close
in
the
future.

In
2022,
it
was
a
really
clear
signal
when
prices
were
falling
sequentially
(see
the
gray
zones).
In
June
and
October
2022,
we
could
clearly
see
the
effect
of
the
rapidly
rising
interest
rates
of
that
time. 

We’re
watching
for
that
again
today.
But
here’s
the
thing:
It
seems
like
we
might
be
finally
past
the
peak
of
mortgage
rates.
Rates
have
been

inching
downward.
The
newest
inflation
data
was
positive.
So,
the
question
is,
at
what
rate
level
is
buyer
demand
stimulated
and
does
it
impact
prices?
Conversely,
what
if
inflation
surprisingly
goes
the
other
way
and 
mortgage
rates
rise
again?
How
quickly
will
that
impact
home
prices?
It’ll
be
quick
and
we’ll
see
it
right
here.
The
market
is
showing
signs
of
growth,
but
homebuyers
are
obviously
sensitive
to
the
cost
of
money.