The United States faces the most competitive January housing market in history

The U.S. housing market is in the midst of what will likely be its most competitive January on record, with house prices already hitting an all-time high and inventory levels at an all-time high, according to a report released Thursday by Redfin.

In the first full week of 2022, ending Jan. 9, the nation’s median home price jumped 16% year-over-year to an all-time high of $365,000.

Prices are inflating due to the continuing “supply drought” which is worsening as demand rises, the online property portal said.

Not only are new homes being listed at a slower rate than this time last year, but the total number of active listings on the market fell 28% year-over-year, falling to an all-time low of 461,000 in the longest four years. one-week period ending January 9.

Despite the shortage, homebuyer activity – which Redfin measures with its Homebuyer Demand Index which tracks requests for home visits and other home buying services – jumped 9%.

“The stage is now set for the most competitive January housing market in recorded history,” Daryl Fairweather, Redfin’s chief economist, said in the report. The company has been tracking market data since 2012.

“Buyers are flocking to the market to clamor for a home before mortgage rates rise further as new listings slow,” she said. Mortgage rates hit 3.45% in the seven days ending Jan. 13 as headline inflation hit a 40-year high, the report said.

The difficult market conditions will be particularly difficult for first-time buyers. They “will have to compete with more experienced buyers who are willing to do whatever it takes to win. But I expect that by the time mortgage rates rise to 3.6%, competition will quickly stabilize at levels similar to late 2018,” Ms Fairweather said.

Penny D. Jackson