This
week
the
available

inventory
of
homes
for
sale
inched
down
across
the
country.
It
was
a
lead
up
to
the
holiday
weekend,
so
that’s
not
uncommon.
But
it
is
indicative
that
we’re
roughly
at
the
peak
of
inventory
for
the
summer.
We
may
have
a
few
more
weeks
of

inventory
gains,
but
the
long
stretch
where
inventory
has
been
growing
compared
to
a
year
ago
is
now
over.

But
while
falling

interest
rates
are
putting
a
floor
on
demand,
there’s
still
no
sign
of
any
rush
of
buyers.

Will
homebuyers
come
back
this
fall,
or
will
we
have
to
wait
until
spring?

Last
week,
I
mentioned
that

Texas
and
Florida
inventory
had
ticked
down.
Both
of
those
states
ticked
up
this
week
with
more
unsold
homes
on
the
market
than
a
week
prior.
I
mention
this
because
it’s
what
I
expect
for
the
whole
country
for
the
next
several
weeks.
A
little
up,
maybe
a
little
down
week
to
week.
I
expect
that
we
won’t
see
consistently
shrinking
inventory
until
later
in
October. 

Let’s
look
at
the
details
of
the
U.S.

real
estate
market
as
we
roll
into
September
2024.

Inventory
lower
than
last
week

There
are
704,000
single-family
homes
unsold
on
the
market
across
the
country
now.
That’s
a
fraction
fewer
than
a
week
prior.
This
was
the
lead
up
to
the
Labor
Day
holiday,
so
it’s
totally
common
for
a
dip
in
inventory.

Mortgage
rates
have
eased
down
in
anticipation
of
the
Federal
Reserve’s
meeting
in
a
couple
weeks.
It’s
widely
expected
that
the
Fed
will
cut
short-term
interest

rates
at
that
meeting.
It’s
important
to
note
that
the
markets
could
react
opposite
of
what
we
expect.
Mortgage
markets
could
cause

mortgage
rates
to
jump
even
if
the
Fed
cuts.
If
that
were
to
happen,
all
these
comments
about
peak
inventory
for
the
season
are
out
the
window.

New
listing
numbers
are
low

There
were
just
59,000
new
listings
unsold
this
week
for
single-family
homes.
There
were
another
10,000
new
listings
that
immediately
sold.
Both
of
those
numbers
are
very
low.
This
week
saw
6%
fewer
sellers
than
even
last
year
which
was
already
super
low.

Since
the
immediate
sales
number
was
only
10,000
that’s
an
indication
of
continued
weak
demand.
We
haven’t
seen
any
uptick
in
buyer
urgency,
as
measured
by
immediate
sales.
The
best

homes
at
the
right
price
still
get
offers
immediately
after
they’re
listed
for
sale.
During
the
pandemic,
when
Americans
were
in
a
home-buying
frenzy,
there
were
25,000
or
30,000
immediate
sales
per
week.

Next
year,
a
healthier
housing
market
will
see
that
number
climb
over
70,000
per
week
to
maybe
80,000
sellers
per
week. 

Pending
home
sales
stay
the
same

There
were
64,000
new
contracts
pending
this
week
for
single-family
homes.
That
level
of
sales
continues
to
be
just
about
the
same
as
last
year.
There
were
another
12,000
condo
sales
started.
76,000
total
sales
this
week
is
2.5%
fewer
than
a
week
ago.
It’s
the
lead
up
to
the
holiday
weekend
so
that
always
ticks
down.

We’re
looking
at
roughly
the
same
level
of
sales
as
last
year,
with
slightly
fewer
sellers,
that’s
why
inventory
is
probably
around
its
seasonal
peak
and
the
annual
gains
in
inventory
compared
to
last
year
are
compressing. 

September
and
October
are
going
to
be
fascinating
to
watch
the
sales
rates.
Each
of
the
last
two
years
September
and
October
were
brutal
for
interest
rates
and
for

buyer
demand.
We’re
on
the
opposite
side
of
the
cycle
now
so
we
are
looking
for
any
relative
strength
in
buyers
this
year?

Home
prices
remain
unchanged

The
median
price
of
U.S.
single-family
homes
this
week
is
$449,000
—
unchanged
for
the
week.
The
median
price
of
the
new
listings
is
$399,999,
also
unchanged
for
the
week.
These
prices
are
just
barely
above
a
year
ago.
This
is
consistent
with
the
concept
of
flat
home
sales
prices
for
the
year. 

The
median
price
of
the
new
contracts
pending
this
week
is
$387,000.
This
is
the
price
point
where
people
are
buying
homes.
That
ticked
up
for
the
week
and
is
still
almost
5%
above
last
year
at
this
time. 

This
price
of
the
new
contracts
is
a
pretty
clear
proxy
for
home
sales.
These
are
the
offers
being
made
each
week.
It
takes
a
little
over
30
days
to
close
the
transaction,
so
these
sales
will
mostly
happen
in
September.
By
this
measure
home
prices
have
been
hovering
in
this
3%
to
5%
annual
appreciation
range
for
most
of
the
year. 

If
you
follow
home
price
indices
like
the

Case
Shiller
Index,
which
was
released
last
week
for
April,
May,
June,
that
is
still
showing
5.4%
home
price
gains
over
2023.
So
the
current
sales
pace
that
we’re
illustrating
here
is
showing
3%
to
5%
gains
over
2023.
There’s
nothing
in
the
data
now
that
shows
price
declines
like
we
had
at
two
points
in
2022.
I

Price
reductions
shows
weak
demand 

The
price
reduction
data
continues
to
tell
the
story
of
weak
demand.
I
don’t
see
any
evidence
of
buyers
accelerating
now
—
even
along
with
recently
lower

mortgage
rates.
This
is
late
in
the
season,
so
it’s
easier
to
see
a
slowdown
than
speed
up
effects
with
homebuyers.
In
other
words,
since
we’re
not
yet
at
the
seasonal
peak
of
price
reductions.

Homes
that
are
still
on
the
market
in
September
and
October
are
more
likely
to
take
a
price
cut
to
attract
buyers
before
the
holidays.
As
we
get
closer
to
the
holidays,
homes
are
more
likely
to
be
withdrawn
so
they’re
not
sitting
on
the
market
with
price
cuts.
We
get
the
seasonal
peak
in
price
cuts
every
year
in
the
fall. 

So
we
will
be
able
to
see
the
slowdown
impact
very
quickly
if
rates
were
to
rise
from
here.
We
saw
that
happen
in
each
of
the
last
two
years
in
September.
Rising
rates
added
to
the
seasonal
slowdown.
Falling
rates
now
won’t
deter
the
seasonal
slowdown
like
they
did
in
2020.
We’re
just
looking
for
the
market
to
behave
a
little
better
than
last
year. 

The
takeaway
here
with
the

price
reductions
data
is
that
this
fall,
price
reductions
will
continue
to
inch
up
each
week.
It’s
that
time
of
year.
We’ll
end
the
year
with
fewer
price
reductions
than
when
we
ended
2022. 
And
that
will
set
us
up
to
see
if
buyers
in
the
spring
of
2025
are
ready
to
embrace
lower
rates
—
assuming
mortgage
rates
are
indeed
lower
by
then. 

The
big
trends
from
earlier
in
the
year
are
shifting
now.
And
that’s
why
we
do
this
data
work
each
week.
If
buyers
finally
start
moving,
we’ll
see
it
in
the
data
quickly.
Maybe
mortgage
rates
have
finally
turned
the
corner?
For
buyers
and
sellers,
these
conditions
can
change
fast
and
it
can
be
very
impactful
for
smart
decision
making.

Mike
Simonsen
is
the
founder
of


Altos
Research.

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