February’s extreme weather throughout the U.S. exacerbated the housing market’s inventory woes, pushing the pace of new listings coming onto the market further behind pre-pandemic levels, according to the realtor.com Monthly Housing Trends Report. Unless the trend reverses itself, buyers will be in for a much more competitive homebuying season than last year.
“Last month’s record cold and snowstorms likely caused sellers to hit pause, even if only temporarily,” said realtor.com Chief Economist Danielle Hale. “However, in today’s inventory-starved market, any setback is significant. Unless we see some big improvements in the new listings trends over the coming months, buyers can expect stiff competition. And unlike last spring, buyers may also face affordability challenges as home prices and mortgage rates increase. Market dynamics continue to favor sellers.”
According to realtor.com data, 14.8% of the year’s total new listings came to market in January and February in 2017 through 2019, and new listings in these months were an even bigger share in 2020 as COVID-19 scared off many would-be sellers later in the year. Approximately 207,000 fewer homes were newly listed for sale during the first two months of 2021, compared with the average for those two months over the last four years. New listings would need to increase by 25% year-over-year in March and April to bring the year to date figure back to April 2020’s levels.
The number of homes for sale in the U.S. in February was down 48.6% year-over-year, a new low that translated into 496,000 fewer homes for sale. New listings were down 24.5% year-over-year, with the biggest drop — 35.2% — occurring in the third week of February, the most extreme weather week of a very cold and snowy month. New listings recovered to a smaller decline of 26.9% year-over-year in February’s final week as conditions eased.
