As the market shifts, buyers and sellers are faced with new opportunities—and new challenges.
The Realtor.com® Monthly Housing Trends Report dives into the changes happening in the market, from an increase in days on market to dwindling seller sentiment.
Days on Market Increases for the First Time in Two Years
In August 2022, the typical U.S. home spent five additional days on the market than last year. This is the first year-over-year increase in time on market since June 2020, according to Realtor.com’s report.
This put the national time on market in August at 42 days for the typical home. For the 50 largest U.S. metros, time on market was 37 days, which is also a five-day increase from August 2021.
While this gives buyers more time to decide and submit an offer, the market is not yet balanced. Houses are still selling 22 days faster than the typical pace in 2017-2019.
Seller Sentiment Declines
As days on market starts to rise, seller sentiment is beginning to drop.
Along with homes spending more days on the market, the number of active listings was up 26.6% year-over-year. In contrast to last year, an additional 164,000 homes were active in August, giving buyers more options to choose from.
These minor wins for buyers have caused cause seller confidence to wane. Today’s homeowners may feel like they missed the peak sales price, while others are concerned about buying their next home.
In turn, the number of new listings declined by 13.4% compared to last August, showing that more sellers are hesitant to list right now. The number of pending listings also fell by 21.9% year-over-year in August.
For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce. As a result of this shift coupled with higher mortgage rates, competition continued to cool in August, with listing price trends indicating that home sellers are noticing shoppers tightening their purse strings.
Home Price Growth and Affordability
Sellers may feel slightly lower than last year due to a shifting market, but some are missing one crucial factor: listing prices continue to increase.
In August, listing prices increased 14.3% year-over-year. The pace of those price increases has decelerated for the third month in a row, but the continued double-digit price growth means sellers continue to receive higher offers.
In addition, today’s seller-buyers have more bargaining power when it comes to closing timelines, which allows for more flexibility when selling one home and buying another.
On the other hand, buyers continue to struggle with affordability, while homeowners have accumulated record-high levels of equity.