Homebuyers Face Less Stress As More Listings Hit The Market

It’s spring home selling season, and there’s good news for buyers who may feel less pressure to commit to a home right away, as more listing options become available.

Realtor.com®’s weekly housing data showed that listing prices flattened even as new listings and active inventory growth continued. The data suggests that March homebuyers will have more options and a little more time to evaluate those options this year than last.

Realtor.com’s forecast calls for home sales to be moderately higher than the 2024 low as a rebound in inventory gives buyers more options and more market power. The fact that mortgage rates are holding steady this year after rising last year is likely to benefit buyers in the spring and should encourage sellers who are targeting the prime time to sell in less than a month.

The Federal Open Market Committee left its interest rate policy unchanged this week, but it will unwind some parts of its balance sheet more slowly. The Fed also released a summary of its members’ economic projections. While the expected policy path remains unchanged, members expect higher inflation and weaker economic and employment conditions than in December.

Mortgage rates, which were mostly collected before this news, rose 2 basis points but have remained in a range of 6.6% to 6.7% for the past three weeks. They are also down from a year ago and from a January peak of just over 7%.

While mortgage rates are not low, they are lower than they were, a factor that likely helped boost existing home sales in February. Despite the month-over-month increase, February’s sales pace lagged behind last year’s fairly high mark, snapping a four-month streak of annual increases.

Construction data shows that starts and permits for multifamily buildings were lower in February across the country, as builders pulled back in the face of lower rents and policy uncertainty.

Households not yet ready to buy will find some relief in the rental market. Rents fell for the 19th consecutive month, although the decline was less than 1%. A steady supply of new rentals helped drive the rent slowdown, but that trend is changing.

However, when we dug into local data, we found construction setbacks even in some markets where rents are rising. For example, in New York City, permits for multifamily buildings are down nearly 10% from their previous five-year average, even as rents rose 6.8% from a year ago, according to the most recent data from Realtor.com. This could mean more rent pressure ahead in New York and the eight other markets in a similar position. Those markets are: Kansas City, Missouri; Detroit; San Jose, California; Baltimore; St. Louis; Charlotte, North Carolina; and Washington, D.C.