New Year Brings New Supply as Seller Activity Shifts MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

 According to the Realtor.com January Monthly Housing Report, January saw a positive shift in seller activity despite recent hikes in mortgage rates, with the number of newly listed homes increasing thirty seven point five percent month-over-month. Sacramento, CA (positive thirty one point seven percent), Phoenix (positive twenty seven point three percent), and Seattle, WA (positive twenty four point seven percent), saw the biggest increases in newly listed homes this month compared to the same period last year among the top fifty metro areas.

 “The shift in seller activity could mark a turning point in the high mortgage rate-induced standoff between buyers and sellers,” said Danielle Hale, Chief Economist at Realtor.com.  “The uptick is likely due to some residual benefit from fall’s lower mortgage rates, which could fade. But drivers such as the need for families to adapt to life changes and the easing of the lock-in effect, could bring more movement from sellers by year’s end.”

 The number of newly listed houses was ten point eight percent higher than the previous year, up from a point nine percent increase in December. This puts the number of new listings at its highest January level since 2021 and indicates that sellers are becoming more interested in the market. The percentage of mortgage holders with a rate below six percent dropped to eighty three percent from eighty eight percent a year earlier, according to a new Realtor.com analysis. By the end of the year, that percentage is predicted to drop to seventy five percent, according to the 2025 Realtor.com Housing Forecast.

U.S. Buyers & Sellers Thaw Alongside Winter Weather

 Additionally, for the fifteenth consecutive month, annual inventory increased, with twenty four point six percent more homes for sale on an average day in January than at the same time in 2024. Denver (positive fifty four point eight percent), Las Vegas (positive forty nine point four percent), and Tucson, AZ (positive forty five percent), saw the largest increases in active listings year-over-year among the most active markets, while New York (positive point three percent), Hartford, CT (positive one point eight percent), and Milwaukee (positive five percent) saw the smallest increases.

January 2025 Housing Metrics – National

 Not only are there more listings, but sellers are also lowering their pricing. Compared to the previous year, the percentage of postings with price reductions increased once again. In fact, compared to January 2024, when fourteen point seven percent of merchants lowered their prices, fifteen point six percent of sellers did so in January.

 Fascinatingly, three Florida markets Jackson (twenty four point three percent), Tampa (twenty four point eight percent), and Orlando (twenty two point three percent) are in the top five with the largest percentage of price reductions. The top five markets with the largest proportion of price decreases were completed by Phoenix (twenty five point five percent) and Portland, OR (twenty two point one percent), in addition to the Florida cities.

Which Regions Are Closest to Closing the Inventory Gap?

 While the Midwest and Northeast suffer, the South and West are getting closer to closing the inventory gap. Each of the four areas continued to reduce the inventory gap in January, but the South and West are by far in the lead. The number of listings increased by thirty one percent in the West and twenty seven point two percent in the South. Although they nevertheless recorded improvements, the Midwest (positive sixteen point eight percent) and Northeast (positive seven point eight percent) lagged behind.

 The inventory gap is also the smallest in the South (negative ten percent) and West (negative thirteen point three percent) when comparing inventory levels to pre-pandemic (2017-2019) levels. This contrasts sharply with the Midwest, where inventory is still down forty three point six peecent from pre-pandemic levels, and the Northeast, where the gap is even greater at fifty eight point one percent.

The top three metros that saw the highest increases in inventory growth this January were:

1. Denver (positive fifty four point eight percent)
2. Las Vegas (positive forty nine point four percent)
3. Tucson (positive forty five percent) 

January 2025 Regional Statistics:

 While January saw the fifteenth straight month of yearly inventory expansion with twenty four point six percent more homes for sale on an average day than at the same time in 2024 this is a significant change from December, when growth was up just twenty two percent year-over-year and broke a five-month trend of falling growth. Even while January’s inventory is undoubtedly getting better, it is still twenty four point eight percent below than average levels from 2017 to 2019.

 The median list price decreased one point eight percent in the South, one point four percent in the West, point nine percent in the Northeast, and point seven percent in the Midwest in January compared to the same month the previous year. Price-per-square-foot growth, however, was flat in the South, two point six percent in the Midwest, two point five percent in the Northeast, and one point two percent in the West when the mix of properties on the market was taken into account. The largest increases in median list prices among large metro areas occurred in Cleveland (positive eleven point three percent), Baltimore (positive six point eight percent), and Milwaukee (positive six percent).

 In the meantime, the price of homes listed before the epidemic has increased significantly in all fifty major cities. The price per square foot growth rate in the top fifty metro areas varied from six percent to sixty two point three percent when compared to December 2019.

The markets with the biggest price increases for sellers were:

1. Boston (positive forty nine point seven percent)
2. Riverside, CA (positive fifty point one percent)
3. Memphis (positive sixty two point three percent vs January 2019)

The markets with the lowest returns were:

1. Minneapolis (positive eleven point six percent)
2. Detroit (positive nine point seven percent)
3. San Francisco (positive six percent)

 The percentage of properties for sale with price reductions was up one point nine percentage points in the West, point nine percentage points in the South, and one point two percentage points in the Midwest compared to the same period last year. The percentage of price decreases in forty one of the fifty largest metro areas increased from twenty six in December to forty one in January of previous year. Grand Rapids (positive four point eight percentage points), Providence (positive five point four percentage points), and Portland (positive ten point five percentage points) had the biggest increases.

 January saw a one point eight percent increase in the number of properties under contract but not yet sold (pending listings), which is still far less than the seven point four percent spike in December. Mortgage rates in January were, on average, twenty five basis points higher than in December, which is at least partly to blame for this slowdown. Even though rates are much higher now than they were only a few months ago, our 2025 prediction indicates that home sales should increase by a modest one point five percent in 2025 as time and lower rates work to break the “lock-in” effect that has held back sales this year.

 Including properties under contract but not yet sold, the overall number of homes for sale grew seventeen point one percent over the previous year, marking the forteenth consecutive month of yearly growth. This represents a modest decrease from seventeen point five percent last month.

To read the full report, including more data, charts, and methodology, click here.

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