Housing Supply at 5-Year High, Demand at 5-Year Low

A new data report from Redfin determined that housing supply in January was at its highest level since 2020, but demand for housing was at its lowest level since 2020.

Pending home sales in January dropped to their lowest recorded level aside from the start of the pandemic – a 4.2% month-over-month decline, which was the largest decline on a seasonally adjusted basis since August 2023; it also marked a 6.3% year-over-year tumble. Existing home sales fell 1.7% in January to a seasonally adjusted annual rate of 4.3 million, the largest monthly decline since October 2023.

At the same time, active listings of homes for sale rose to the highest level since early in the pandemic – up 0.3% month-over-month on a seasonally adjusted basis in January and up 12.9% year-over-year. New listings reached the highest level since July 2022, increasing 1.9% from December and 4.7% from January 2024.

As a result of this wobbly market, deals are falling through at a greater than normal speed. Roughly 41,000 home-purchase agreements were canceled in January, equal to 14.3% of homes that went under contract last month – this is up from 13.4% a year earlier and is the highest for a January going back to when Redfin started tracking this data in 2017.

“On a national scale, we’re seeing an increase in people selling homes and decrease in people buying homes, bringing supply and demand closer to equilibrium. But the national snapshot masks a lot of regional variation,” said Redfin Senior Economist Elijah de la Campa. “For example, pending sales are rising from a year ago in expensive coastal markets like San Jose and Seattle, and posting double-digit declines in pandemic boomtowns like Miami and Austin. In Newark, active listings are near an all-time low, but in San Antonio, they’re near a record high.”