Housing inventory was up 61.4% during the first week of the year compared with the same week in 2022, but new listings were down 21% year-over-year at the close of 2022. There are currently 5.5 months of new homes under construction, a share well above the normal level due to lingering supply chain constraints, according to the CalculatedRisk Newsletter.
Despite a rise in new-construction projects, there are just 1.2 months of completed homes for sale, though that total is expected to rise as delayed projects are finished over the next several months. As mortgage rates surge, would-be sellers are holding off on listing their properties, but new-construction inventory could prevent prices from slipping in the year ahead.
There are always some people that need to sell; death, divorce, moving for employment are a few reasons. However, homeowners with a low mortgage rate will be reluctant to sell, and then buy a new home, when their monthly payment will be much higher for the new home. The sharp increase in mortgage rates is probably the key reason new listings have declined sharply year-over-year.
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