Housing Market Activity Remains Sharply Low as Rate Hikes Continue to Drive Buyers Toward the Rental Market

Increasing Interest Rates Lead Potential Buyers to Steer Away from the Purchase Market, Increasing Demand in the Rental Market

July 2023 Records a 40.3% Decrease in Net New Listing Volume Compared to the Same Period in 2022, Signaling Low Housing Market Activity

Despite the Low Market Activity, Both Listed and Closed Prices Continue to Experience Positive Year-Over-Year Growth, with Closed Prices Showing Steady and Rapid Expansion

HouseCanary, Inc. (“HouseCanary”), a national brokerage known for its real estate valuation accuracy, today released its latest Market Pulse report, finding that market activity in terms of net new listing volume remains low in July, while both listed and closed prices continue to show positive year-over-year growth.

After a halt on the increasing rate hikes by the Federal Reserve in June, experts predict rates to increase to 5.6% by the end of 2023. The continuous risk of increasing interest and mortgage rates has homeowners and potential buyers distancing themselves from the purchase market and redirecting their interest toward the rental market as our Q2 Rental Report data found.

Jeremy Sicklick, Co-Founder and Chief Executive Officer of HouseCanary, commented:

“In June, the housing market initially showed signs of resilience, but these reversed as we continued to face the effects of rate hikes initiated in March 2022. July has followed suit with stagnant performance as the Federal Reserve implemented another rate increase and potential homebuyers remained cautious amidst market uncertainties. Notably, listed prices reached their peak in June, but closed prices have maintained steady and rapid growth into July. As we move into Q3, it is anticipated that both listing and closed prices will continue to rise compared to the previous year, offering some relief from the upcoming rate hikes.”

Key Takeaways:

• For the month of July 2023, 227,621 net new listings were placed on the market, and 268,264 properties went under contract. This represents a decrease of 40.3% and 13.4%, respectively, versus July 2022.

• The decrease in net new listings was driven by a 36.5% decrease in new listing volume as well as a 13.5% decrease in removals compared to July 2022.

• Median days on market stood at 35, up 9.4% from the prior year at 32 days on market.

• The sale-to-list-price ratio stands at 99.4%, which is well above the lowest value observed in January 2023.

• Price cuts are up 34.2% year-over-year but are down nearly 42% from their recent peaks occurring in September and October 2022.

• Total inventory is down 13.3% from the same period in 2022, and down 10.3% from 2021. Inventory remains very low from a historical perspective.

• Total single-family rental inventory is up 51% from the same period in 2022, and up 157.7% from 2021.

Methodology

The Market Pulse is an ongoing review of proprietary data and insights from HouseCanary’s nationwide platform, covering 22 listing-derived metrics and comparing data between July 2022 and July 2023.

About HouseCanary

Founded in 2013, national real estate brokerage HouseCanary empowers consumers, financial institutions, investors, and mortgage lenders, with industry-leading services including valuations, forecasts, and transactions. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com.

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