A couple of months ago, we pointed out bearish news in the housing market as represented by a rising number of price cuts as well as a decline in the purchase of U.S. real estate by foreign buyers.
Now there is additional data that further supports evidence of a softening residential property market. This new data comes from three sources:
- Surge of New Listings: New listings jumped the most since 2013, according to a report by Realtor.com. The number of new listings on realtor.com in September shot up 8% year over year, that’s the biggest jump since 2013. “It’s a key inflection point,” says Chief Economist Danielle Hale of realtor.com. The surge in listings could indicate that many homeowners feel home prices have peaked and now is the time to cash-in. If so, a deluge of listings (i.e. supply) can ultimately push home prices down.
- Home Sales Plunge to the Lowest Level in 3-Years: According to the National Association of Realtors, U.S. existing-home sales declined in September 2018 after a flat month in August 2018. All four major regions saw no gain in sales activity last month. Total existing-home sales fell 3.4 percent from August 2018 to a seasonally adjusted rate of 5.15 million in September. Sales are now down 4.1 percent from a year ago (5.37 million in September 2017).NAR chief economist Lawrence Yun, says rising interest rates have led to a decline in sales across all regions of the country. “This is the lowest existing home sales level since November 2015,” he said. “A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
- Annual Rents Declined for the First Time in 6-Years: Based on a new report by Zillow, U.S. home rents declined nationwide on an annual basis in September 2018, for the first time in more than six years.
The median U.S. rent is $1,440.00, down 0.2 percent (which translates to $36 in annual rent) from last September 2017, the first annual nationwide decrease since July 2012. Rent appreciation slowed for seven consecutive months before turning negative in September.Rents decreased on an annual basis in more than half of the nation’s 35 largest markets. The biggest declines in rent were in Portland, Ore., where rents fell 2.7 percent, and Seattle, where they fell 2.2 percent. However, some markets are still seeing rising rents: Riverside, Calif., rents increased the most, up 3 percent from last September.