The housing market is getting stranger by the day.
While affordability has arguably never been worse, prices are rising and there are virtually no homes for sale.
This is making it difficult for both housing bulls and bears to make the case for a boom or a crash.
When all is said and done, we might just experience a stagnant market that fails to keep up with inflation.
And a severe economic downturn in the housing industry due to a lack of sales volume.
New For Sale Listings Hit Seasonal Low in June
First things first, new real estate listings are off a whopping 25% from a year ago, according to a new report from Redfin.
This covers the four-week time period ending on June 4th. Just 89,249 homes were listed.
And the real estate brokerage noted that new listings fell in all metros analyzed.
The declines were the most pronounced in Las Vegas (-42.3% YoY), Phoenix (-40.9%), Seattle (-40.4%), Oakland (-39.8%), and San Diego (-37.2%).
These happen to be areas that saw massive home price appreciation, then big home price corrections.
It seems homeowners are now staying put in these areas, perhaps as they come to terms with the inability to make a move from a financial standpoint.
Ultimately, the mortgage-rate lock in effect continues to make it both unfavorable and sometimes impossible for existing homeowners to move.
Simply put, selling your home with a 2-3% mortgage rate, only to buy one with a 7% mortgage rate, doesn’t pencil.
And rents aren’t cheap either, so it’s not a viable option to sell and rent for much less.
Active Real Estate Listings Are Falling When They Typically Rise
Meanwhile, active listings (the number of for-sale homes available at any point during the period) declined 4.6% from a year earlier.
This was just the second decline in 12 months, the first being a week earlier when actives fell 1.7%.
Redfin noted that active listings were also down month-to-month at a time of year when they typically rise.
Because of the lack of new listings, the total number of homes on the market fell to its lowest level on record for an early June.
Long story short, there is no housing inventory, which is somewhat good news because there aren’t a lot of buyers either.
As noted, affordability isn’t great with mortgage rates at/near 7% and home prices still historically high.
This explains why the median home sale price was down just 1.6% from a year ago at $379,463.
That represented the smallest decline in the past three months as many markets that were down year-over-year begin to turn things around.
Housing Supply Is Up Slightly from a Year Ago
While new listings and active inventory are down, housing supply inched up a bit from last year.
As of June 4th, supply was at 2.6 months, which is the amount of time it would take to clear inventory at the current sales pace.
But while it’s up 0.5% from a year ago, it’s still well below the 4-5 months that represents a healthy, balanced housing market.
The reason it’s higher is because homes are sitting on the market longer and taking more time to receive offers.
Again, you can blame affordability for this as there are fewer eligible buyers out there. And perhaps fewer who are interested even if they can afford it.
About a third of homes that went under contract received an accepted offer within the first two weeks on the market, down from 38% a year ago.
And homes that sold were on the market for a median 28 days (the shortest span since September), but much longer than the record low 18 days a year earlier.
So it’s clear the housing market isn’t thriving at the moment, but due to a continued lack of inventory, prices remain sticky.
But that could change if mortgage rates remain elevated during the softer part of the calendar year (summer/fall/winter).
Still, the resilience of home prices continues to exceed expectations and defy the housing bears.
Read more: When will the housing market crash again?