Housing Market Recovery Index: Newly Listed Existing Homes Trend Improves but Remains too Low to Alleviate Supply Crunch

Housing Market Recovery Index Highlights – Week Ending February 13

  • The realtor.com Housing Market Recovery Index reached 103.1 nationwide, up 1.6 points over the prior week.
  • The ‘housing supply’ component of our index improved by 5.3 points over the previous week, but newly listed homes are still declining compared to the previous year.
  • The overall recovery index is showing the greatest recovery in  Austin, Denver, San Antonio, Riverside and Sacramento.

Download the full Housing Market Recovery Index dataset here.

National Recovery Trends

This week, the realtor.com Housing Market Recovery Index reached 103.1 nationwide, up 1.6 points over the prior week and hovering just above the recovery pace. This week’s increase was driven by a slight improvement in newly listed homes, a quickening in the pace of sales, and rising listing prices. However, the improvement to the score was moderated by a decline in the growth rate of buyer demand, likely driven by frustration with historically low home inventory levels.  

The ‘housing demand’ component of our index declined by 4.2 points over the previous week, as a lack of newly listed homes likely impacted home search activity. Meanwhile, the ‘pace of sales’ component increased by 1.5 points, not yet showing signs of a slowdown despite the dip in buyer activity. Home listing prices continue to grow at double-digit rates and are not expected to provide immediate relief to buyers as demand remains elevated and supply remains tight. The New Supply Growth Index registered a healthy improvement, increasing by 5.3 points over the prior week. However, the supply of newly listed homes continues to remain highly variable. Despite healthy growth in the number of newly constructed single-family homes, a more sustained increase in newly listed existing homes would be required to alleviate this ongoing supply crunch. Looking forward to next week, it’s likely that the recovery index will take another dip as housing activity may be impacted while metros across the country struggle with extreme weather conditions.

Week ending 2/13 Current

Index

w/w Change
Overall Housing Recovery Index 103.1 +1.6
Housing Demand Growth Index 114.5 -4.2
Listing Price Growth Index 109.3 +0.1
New Supply Growth Index 84.6 +5.3
Pace of Sales Index 111.6 +1.5

The ‘housing demand’ component decreased again to 114.5 this past week, down 4.2 points over last week. The drop in the growth of active online home shoppers over the past couple of weeks can be partially attributed to all-time lows in the inventory of existing homes for sale. While overall online home shopping activity has lost the momentum it had last fall and earlier this winter, interest in homes for sale remains strong, as the number of home shoppers viewing each property remains near all-time highs.

The ‘home price’ component remained fairly stable, at 109.3 points this past week, well above the January 2020 baseline and 0.1 points above the previous week. This week marks the end of the four-week trend that saw listing price growth decelerate. With inventory failing to see visible improvement, and buyer demand remaining elevated, asking prices may continue to rise near-record levels even as short-term economic and COVID concerns linger.

The ‘pace of sales’ component – which tracks differences in time-on-market – held well above the pre-COVID baseline at 111.6, 1.5 points higher than the previous week. Crucially, homes continue to move at a record pace for this time of the year and faster than in pre-pandemic times.

The ‘housing supply’ component – which tracks the growth of new listings – improved over the last week after a large drop the previous week. Last week, the supply component increased to 84.6, 5.3 points more than the previous week but still 15.4 points below the baseline. We’ve seen selling activity fail to find the right gear in the post-pandemic period, and the slow start to the year by sellers of existing homes proves their urgency remains lower than that of buyers. 

LOCAL TRENDS

This week, metros in all regions saw improvements to their recovery index scores, mostly driven by an improvement in the growth rate of newly listed homes. Southern metros improved most, led by Austin, which has seen a flood of interest from western metros, rapidly decreasing time on market, and accelerating listing prices.  . 

Region Avg Recovery Index

(week ending 2/6)

w/w Change
West 114.6 +2.5
Midwest 99.3 +2.7
Northeast 100.3 +2.7
South 107.6 +3.4

38 of 50 Largest Markets Start Above Recovery Benchmark

Locally, a total of 38 markets have remained above the recovery benchmark, five more than the previous week. Twelve markets remain now below the recovery pace, at least temporarily. The overall recovery index is showing the greatest recovery in Austin, Denver, San Antonio, Riverside, and Sacramento.

In the ‘housing demand’ component, 43 of the 50 largest markets are still positioned above the recovery trend, three less than the previous week. However, buyer demand remains strong in the face of many disruptions. The most recovered markets for home-buying interest include primarily southern metros such as Tampa, Austin, Houston, Orlando, and Miami with a housing demand growth index between 141 and 165.

In the ‘home price’ component, 33 of the 50 largest markets seeing growth in asking prices surpass the January 2020 baseline, two more than the previous week. The most recovered markets for home prices include Austin, Buffalo, Detroit, Richmond, and Riverside, with a home price growth index between 115 and 136.

In the ‘pace of sales’ component, 44 of the 50 largest markets are now seeing the time on market index surpass the January 2020 baseline, three more than the previous week. The most recovered markets for time-on-market include Austin, Riverside, Portland, Denver, and Los Angeles, with a pace of sales growth index between 146 and 155.

In the ‘housing supply’ component, only 11 of the 50 largest markets saw the new listings index remain above the January 2020 baseline, however, this is 6 more than the previous week. Despite many states reporting sustained declines in daily new cases of COVID-19, local measures to curb the spread, as well as general-sentiment about the pandemic, continue to slow the entry of new listings to the market. The markets which are seeing newly listed homes grow most quickly compared to baseline are San Jose, San Francisco, Denver, Las Vegas, and San Antonio, with a new listings growth index between 123 and 149.  



How to read the index – the overall index is set to 100 for the last week of January based on average year-over-year trends that month, and updated every week relative to that baseline. A value of 100 means the market has recovered to January 2020 pace. The higher the index value, the higher the level of recovery. The lower the index value, the lower the level of recovery. 


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2020 Housing Market Predictions – COVID-19 Update - Realtor.com

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