Does home sales data say prices are falling?

What does the latest housing sales data say?

Altos Research released their most recent housing market update, and they did their usual deep dive into housing sales data.

The question that Mike Simonsen of Altos Research started with was, “If demand for homes at these prices has fallen, why haven’t home prices fallen to meet demand?” The answer is that while demand is low, supply is also low.

The active inventory of single-family homes on the market grew again this past week, but it’s only up 1.4% week over week. Inventory is also growing faster than last year but will likely peak later in the year than last year. It’s unusual for home inventory to peak into November, but it’s not unheard of. For home prices to fall, we’d need to see a dramatic increase in inventory along with soft demand. We have soft demand, but we simply don’t see the large increase in available homes that could make home prices move lower.

However, price/demand balance is slowly moving in favor of a buyer’s market. 38.5% of homes on the market have undergone a price cut. That’s been increasing week-over-week for the past few months. That’s slightly lower than last year’s 42.5% rate, but it’s still at a level that the Altos Research team would consider elevated.

Home prices are likely to end the year higher than last year, but the difference is small. Last year, the national average for a median home list price was $429,000. This year? $435,000. That’s a difference of only 1.4%.

Where did mortgage rates start the week?

The national average for a 30-year, fixed-rate mortgage ended Monday’s session down 0.06% to 7.91%*. A rally in 10-year treasury yields allowed for the national average for a 30-year, fixed rate mortgage to recede from the 8.00% mark it’s been hovering at.

It remains to be seen if this is the start of a softening of mortgage rates down to the 7.00% level or if they’re going to move back towards their 23-year high levels.

Which metros have the highest & lowest down payments?

A recent report from Realtor.com reviewed the differences in down payments by market. They also listed out the 10 markets with the highest and lowest average down payments on home sales.

The area with the largest down payment? Homebuyers in the Santa Rosa, CA metro area put down 25% of a home’s value on average when making a purchase. Aside from Santa Rosea, the highest down payment list was well represented by the Northeast. Boston, MA, Portland, ME, Salisbury, ND, and New York City all made the top 10. Coming in second place on the list was North Port, FL. Homebuyers in the North Port area average a 23.5% down payment on a home.

The list also covered the areas that have the lowest average down payment on home purchase. The majority of the list was metro areas in the Southeastern corner of the U.S. Killeen, TX took the top spot with homebuyers making a 5.3% down payment on average. Fayetteville, NC, Shreveport, LA, Augusta, GA, Mobile, AL, Lakeland, FL, and Gulfport, MS were among the southeastern metro areas on the low end of the average down payment spectrum.


* National average rates accurate as of 10/23/23 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.