Unlocking the ‘Lock-in Effect’: Nationwide Housing Supply on the Rise 

New listings increased 3.8% month-over-month in February, reaching its highest level since September 2022, according to a new Redfin research. New listings rose 14.8% year-over-year, the highest annual increase since May 2021.

Active listings, or the overall availability of properties for sale, reached its highest level in more than a year. On a seasonally adjusted basis, they increased 0.8% from the previous month and decreased by 0.1% from the previous year, the smallest yearly loss in months.

Texas had the most increase in new listings over the previous year, while Florida had the highest increase in active listings—the two states with the most housing construction. Condo listings in Florida, in particular, are contributing to the increase in supply as HOA and insurance prices rise.

“The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it’s better than it was last year. It’s coming back,” said David Palmer, a Redfin Premier real estate agent in Seattle. “Sellers who were on the fence in 2023 are now listing. They’re more used to elevated rates now. There still aren’t enough listings to quench pent-up buyer demand, but it’s getting better.”

Housing supply is increasing across the U.S. as the “lock-in effect” continues to fade. Eventually, homeowners who have been holding on to their ultra-low mortgage rates will be forced to leave.

“February was a mixed bag for the housing market and the economy,” said Chen Zhao, Redfin Economics Research Lead. “Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale. Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated.”

Mortgage-purchase applications fell in February as mortgage rates rose after decreasing in December. The average 30-year fixed mortgage rate rose to 6.78% last month from 6.64% in January. Mortgage rates are likely to remain up for a little longer than expected, following this week’s hotter-than-expected inflation data.

In addition, home sales rose 0.5% month-over-month on a seasonally adjusted basis in February, but declined 3.5% year-over-year.

Metro-Level Highlights: February 2024

  • New listings: New listings rose most from a year earlier in Austin, TX (44.6%), Dallas (38.1%) and Charleston, SC (36.8%). They fell in two metros–Albany, NY (-2.9%) and Buffalo, NY (-0.7%) –and were flat in Fresno, CA (0%).
  • Active listings (total supply): Active listings increased fastest in Cape Coral, FL (60.6%), North Port, FL (52.5%) and Fort Lauderdale, FL (25.5%). They decreased fastest in Raleigh, NC (-24.4%), New Brunswick, NJ (-19%) and Nassau County, NY (-18.5%).
  • Prices: Median sale prices rose most from a year earlier in Newark, NJ (16.5%), Anaheim, CA (15.8%) and Grand Rapids, MI (15.8%). They fell in three metros: San Antonio (-4.2%), Memphis, TN (-3.5%) and North Port (-2.2%).
  • Closed home sales: Closed sales rose most in San Jose, CA (24.9%), San Francisco (21.1%) and Dayton, OH (15.1%). They fell most in Frederick, MD (-14.8%), New Orleans (-14.2%) and Tulsa, OK (-14%).
  • Sold above list price: In San Jose, 65.3% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Rochester, NY (62.8%) and Oakland, CA (62.3%). The shares were lowest in North Port (6.6%), Cape Coral (8.3%) and West Palm Beach, FL (8.7%).
  • Off market in two weeks: In Seattle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Rochester (75%) and San Jose (70.9%). The lowest shares were in Honolulu (8.4%), Greensboro, NC (19%) and McAllen, TX (20.8%).
  • Days on market: The typical home that went under contract in Seattle did so in 11 days, making the fastest market among those Redfin analyzed. Next came Rochester (12) and San Jose (12). The slowest markets were New Orleans (97), Austin (82) and Honolulu (77).

Home Prices Post Largest Increase in Nearly a Year and a Half

The median US home sale price increased 6.6% year-over-year—the largest increase since September 2022—to approximately $412,778.

Prices have continued to grow because, despite the recent increase in listings, there is still insufficient supply to match demand. Both new and active listings remained well below pre-pandemic levels in February.

“If you price your home reasonably, buyers will show up. If you don’t, buyers will wait for you to drop the price,” Palmer said. “I recently listed an estate sale fixer upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency.”

In Seattle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. It took the top spot from Rochester, which has held that title for months. The typical home that went under contract in Seattle did so in 11 days (versus a national median of 48 days).

To read the full report, including more data, charts, and methodology, click here.

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Demetria C. Lester

Demetria C. Lester

Demetria C. Lester is a reporter for MortgagePoint (formerly DS News and MReport) with more than eight years of writing and editing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is a jazz aficionado, Harry Potter fanatic, and likes to read. She can be reached at demetria.lester@thefivestar.com.
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