Home Values Start to Slip As Summer Heat Fades from Housing Market (September 2023 Market Report)
The typical U.S. home value fell 0.1% from August to September – the first month-over-month decline since February. Annual price growth climbed higher, to a 2.1% gain over September 2022’s level, after registering 1.3% year-over-year growth in August. The divergence stems from prices falling more rapidly at this time last year than they are now.
Home-buying conditions have continued to ease since late summer. Not only did price growth tip negative, but closed-sales data from August showed fewer homes selling above their list price (37.7%, vs 40.2% in July).
In addition, listing data in September showed a continued rise in the share of listings with price cuts, up to 23.9% (vs. 23.4% in August), while listings in September took 15 days to go pending (vs. 13 in August, but vs. 17 days a year ago).
Sales activity stepped down as well, but the seasonal decline was more muted this year than last: There were 14.8% fewer newly pending listings in September than last year, vs. an 18.9% year-over-year dip in August.
New listings dipped 6.4% from August to September, and were down only 9.3% from last year, vs. a 12.7% year-over-year decline in August, and even more drastic annual declines earlier in the summer. While home shoppers still face limited fresh options on the market each month, this metric is trending in the right direction, and buyers might see year-over-year gains in new listings starting as soon as this winter, if current trends continue. The pool of inventory expanded slightly, by just 0.2%, from August to September. The peak of inventory for the year is likely close, if not already here.
Most of the 50 largest metropolitan areas now have higher home values than this time last year, although several saw month-over-month declines in September.
- Home values climbed month-over-month in 14 of the 50 largest metro areas in September, down from 32 last month. Gains were biggest in San Diego (0.8%), Miami (0.5%), Hartford (0.3%), Los Angeles (0.3%), and San Jose (0.3%).
- Home values fell, on a monthly basis, in 32 major metro areas, up from 12 last month. The largest monthly drops were in Austin (-1.4%), New Orleans (-1.4%), San Antonio (-0.9%), Portland (-0.6%), and Minneapolis (-0.6%).
- Home values are up from year-ago levels in more than half (31) of the 50 largest metro areas. Annual price gains are highest in Hartford (11.1%), Milwaukee (8.5%), Providence (6.4%), Virginia Beach (6.2%), and Philadelphia (6.1%).
- Home values are still down from year-ago levels in 18 major metro areas. The largest drops were in Austin (-10.0%), New Orleans (-8.8%), Las Vegas (-4.3%), Phoenix (-4.2%) and San Antonio (-2.5%).
New listings are now only down 9% from last year; inventory is down about 10% year-over-year.
- New listings fell 6.4% month over month from August to September.
- There were 9.3% fewer new listings this September than last year, vs. a decline of 12.7% year over year in August.
- Inventory (the number of listings active at any time during the month) in September climbed 0.2% from August.
- There were 10.2% fewer ever-active listings in September than last year, vs. a decline of 13.8% in August.
Newly pending listings entered into sharper seasonal decline, and took longer to sell.
- Newly pending listings declined 13% in September from August, after a 1.2% decline in August.
- Newly pending listings were down 14.8% from last year (vs. a year-over-year decline of 18.9% in August).
- Median days to pending climbed to 15 days, from 13 days in August.
- Median days to pending fell from 17 last September, matching August’s year-over-year decline of two days.
Rents are still climbing slowly.
- On the whole, rental market trends seem to be returning to normal, and September continued the normal seasonal trend of cooler growth in the second half of the year.
- Asking rents climbed 0.2% month-over-month in September. That is slightly more than the pre-pandemic average for this time of year — when rents are typically flat — similar to last September’s growth rate, and much slower than September 2021’s growth rate.
- Rents are now only 3.2% higher than in September of last year – a slower year-over-year growth rate than observed in 2019 (4% full-year rent growth) or 2018 (4.2%).
See more on rents in the September 2023 Rental Market Report.