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New rules set to shake up real estate market
The National Association of Realtors (NAR) massive real estate settlement that changes the way homes are bought and sold goes into effect on Saturday, August 17. FOX Business' Katrina Campins joined LiveNOW from FOX to break down how the new rules could impact the housing market.
null - Many U.S. homes are becoming "stale" inventory, which refers to a listing that sits on the market for at least 30 days without going under contract, amid high housing costs and mortgage rates.
With mortgage rates more than double what they were in 2021, people are being sidelined from homebuying – including sellers who locked in lower rates during the pandemic and don’t want to move and pay a more expensive mortgage.
The result is that most buyers are only willing to pay sky-high housing costs for something truly worth it: move-in ready homes in popular neighborhoods, according to real estate brokerage Redfin. And the less-desirable listings are left sitting on the market, causing unsold inventory to pile up, Redfin notes.
RELATED: Map: Here's how long it takes to sell a house in your state
What’s a ‘stale’ home listing?
FILE - A home for sale on Oak Street in Patchogue, New York, on May 17, 2022. (Steve Pfost/Newsday RM via Getty Images)
The amount of time it takes for a listing to become "stale" can vary based on the market, the location, and even the type of property.
Redfin regularly tracks housing market data and considers a listing "stale" after going at least 30 days without going under contract. Redfin’s housing-market data, which goes back through 2012, also includes homes that were on the market for at least 60 days without going under contract and were actively listed on the final day of the month.
This summer, the real estate brokerage said more than three in five (61.9%) homes in the U.S. that were on the market in May had become "stale" – up from 60% one year earlier and roughly 50% two years earlier.
"Stubbornly high mortgage rates and record-high home prices have priced out many homebuyers, tempering demand even at a time of year when the housing market is typically warming up," Redfin said in a report from June.
Currently, the average rate on a 30-year mortgage in the U.S. is 6.35%, according to mortgage buyer Freddie Mac – which is more than double the pandemic-era low.
States with the highest percentage of ‘stale’ listings
States with the highest percentage of homes on the market after 30 days
- Louisiana - 77.6%
- Hawaii - 77.3%
- Montana - 76.2%
- Florida - 76.0%
- Washington, D.C. - 74.4%
States with the lowest percentage of homes on the market after 30 days
- Rhode Island - 55.0%
- Ohio - 57.2%
- Wisconsin - 58.9%
- Massachusetts - 59.2%
- Illinois - 59.4%
Factors that affect how quickly a home sells
Some houses can sell in a weekend, while others take longer – thanks to several factors. This includes the neighborhood in which the home is located and the housing market, which is constantly changing.
"Sellers can’t control how much competition they’ll face from other sellers," Realtor.com Chief Economist Danielle Hale said in blog post earlier this year. "But they can make sure that they prepare thoughtfully before listing their home for sale, including making necessary repairs, cleaning or decluttering, and taking great photos to showcase their property and entice buyers to visit and imagine calling it home."
Understanding current market conditions will save sellers from pricing their home too high – often leading to a home sitting on the market and becoming stale, according to Realtor.com.
The timing of when the home is listed can also make a difference.
"Generally, by choosing to list your property during peak seasons such as spring or summer, when buyer activity is typically higher, you will attract more interest and potentially land better offers on your home," Realtor.com said.
Lastly, vetting potential real estate agents who have a proven track record in that specific market can help, too.