The number of active home listings fell to a new all-time low earlier this month, while home prices continued to hit record highs.
The listings were down 25 percent from last year, and 43 percent from 2019.
Active listings, according to Redfin, are the number of homes listed for sale at any point during a specified four-week period. This period ended Dec. 5.
Meanwhile, median home sale prices were up 14 percent, to hit a new all-time high of $360,250.
Experts say homebuying demand typically slows in the last few weeks of the year, and the market appears to be entering that phase.
Due to economic uncertainty, experts also predict that home prices will continue to grow in the near future.
Although the seasonal home buying decline slowed sales in the past week, 31 percent of homes that went under contract prior to the slowdown had an accepted offer within one week of entering the market.
This number is up 26 percent from last year, and up 17 percent from 2019. The average home sold for 0.5 percent over its asking price.
On trend with the season, mortgage purchase applications also have recently decreased. Home tours appear to be close to last year’s number, yet are ahead of 2019.
While experts have mixed predictions on where the market is headed into 2022, many expect that demand will continue to be strong.
Some experts predict that if mortgage rates continue to rise, the first noticeable changes will be in a reduced number of immediate sales, including multiple offers and bidding wars.
Another sign would be the number of homes with reduced prices. Typically, in a normal market, 30 to 35 percent of sellers will overprice their homes before eventually reducing the price.
It can take several months for rising rates to significantly discourage buyers, experts say. The dance of rising rates and low inventory, however, may begin to create more of a balance in the market over time.
With most real estate experts predicting a slow market cooldown, interested homebuyers or those who want to refinance still have plenty of opportunities to do so.
Even if low inventory remains an issue, homeowners may continue to take advantage of sustained high home prices to cash out on their equity, or to adjust their rate and terms.
Money from a cash-out refinance can be used however the homeowner chooses. Common uses are for home improvement, paying down high-interest debts, education costs, or emergency expenses.