November 2023 Housing Market Update: No inventory growth in sight despite high mortgage rates
_____________________________________________________________

Supply – record lows and falling
- There were 10% fewer homes listed this October compared to last, the fewest in any October on record.
- There are 27% fewer homes for sale than there were last October.
- Fun fact: In no month this year has inventory crossed above 18,000 homes, but prior to this year, there were only 3 months where inventory was ever below 18,000 homes – all in 2021, of course.

Demand – downward trend may be ending?
- Pending contracts were down only 2% from last October. This trend appears to mark the end of demand’s 2-year freefall.
- October closings were down 22% compared to last year. Declines in closed sales have not tapered off yet, but based on contract activity, I expect to see this closed sales flatten out soon.

Supply/Demand Relationship – seemingly perpetual seller’s market
- Seasonally adjusted housing supply still stands at 1.8 months, unchanged for two full years since November 2021.
- Seasonally adjusted median days to contract fell to 9, virtually unchanged since July 2021.

Prices – rising again
- October was the second consecutive month of seasonally adjusted price appreciation, with prices rising by 1.7% compared to the prior 12 months.
- October prices were up 7.3% compared to last October, the third consecutive month of 7% growth.

Mortgage rates – highest reported in 20+ years
- Today’s (11/7/23) 30yr fixed averages 7.46% after peaking over 8% for the first time since October 2000 and then dropping a half-point in the past 7 days. Again, we note that prices are coming back 7% over last year at the same time mortgage rates are the highest they’ve been in over 20 years.
- FHA/VA loans are way lower, 6.82% as is the 15yr fixed. ARMs are priced out of the game.
- Last week the Federal Reserve voted to keep the bank overnight borrowing rate steady at 5.25-5.5%, rather than raise it, in light of encouraging inflation news. They meet again in December and are not discussing any potential for decreases, only holding steady or increasing.

What to do?
- Sellers: Low supply persists and it’s perking up prices, now 3 months in a row. I still recommend pricing against active listings more than closed sales, especially with seasonality in effect.
- Buyers: I’m confident in stating that you will find a home bought today is more affordable than a home bought tomorrow. Make your move!