Buyers Gain Negotiating Leverage on Sale Price as Home Listings Rise

The Thanksgiving holiday served up more home listings for buyers to choose from, according to the Realtor.com® Weekly Housing Trends report.

The growing inventory, along with falling list prices, led to a slower pace of sales. This comes as mortgage interest rates for a 30-year fixed rate mortgage slid for the second straight week to 6.19% for the week ending Dec. 4, according to Freddie Mac.

Affordability is still a sticking point for buyers, as pending home sales were down year over year. But Realtor.com economists say there may be some relief as home price growth was the weakest it has been in over two years.

"Though mortgage rates are falling slightly and are projected to remain in the low-6% range through next year, they are high enough compared to where they were in recent memory to make would-be buyers feel like the cost of financing their home purchase is too much," explains Joel Berner, senior economist at Realtor.com.

"Homes are now spending just slightly less time on the market than they were pre-pandemic (though much more time than immediately post-pandemic). The market conditions are more similar to the pre-pandemic period, but because rates are so much higher than they were in 2021 and 2022 (and this is fresh in many memories), rates feel high and buyers feel discouraged."

New-construction homes may appeal to buyers who've been hesitant to make a move. If the thought of buying a newly built home seems more expensive than an existing home that isn't necessarily the case, as builders are offering incentives to lure buyers.

Overall, the trends point toward a market moving in a buyer-friendly direction after years of sellers "wielding the power."

The report reveals that the housing market is in a good spot to see improved sales volume, with high levels of inventory and softening prices.

But consumer confidence is filled with uncertainty. For people who are ready to make a purchase, they may be able to find some deals on the home of their dreams.

Home inventory

Home listings continued to grow with active inventory climbing 11.7% year over year, according to the report.

The inventory growth is driven by new listings (a measure of sellers putting homes up for sale). Though new listings fell by 3.8% year over year, overall it was still up 5.6% year to date. The decrease could be attributed to the Thanksgiving holiday which is usually a time when new homes are less likely to be listed.

Homes are taking longer to sell—spending two days longer on the market compared to a year ago. November, though, usually sees longer selling times, but more frequent price reductions and lower list prices are helping transactions move.

"For home inventory to decrease, there likely needs to be a major uptick in sales activity that will bring time on market down," says Berner. "Now, even with new listings falling year over year, inventory is still well ahead of last year at this time because the pace of sales is so slow and homes are spending so long on the market. For now, things keep moving in buyers' favor and inventory continues to grow."

The median list price of homes also fell 0.2% compared to the same time last year. The price per square foot fell 1% from the prior year—this marks the 13th-straight week of declines after the price per square foot grew steadily for almost two years.

The combination of slower sales, rising inventory, and increased price cuts is reflected in lower listing values.

"This combination suggests weak demand. Even though buying conditions are improving, many would-be buyers are spooked by relatively high mortgage rates and the uncertainty that pervades the economy at large, and are choosing not to make a purchase," Berner says.