The supply trend in the housing market is a cause for concern as we approach 2025.

• A new report from Redfin shows that active listings in November 2023 were 12.1% higher than in November 2023 and reached their highest level since 2020.
• Over half of the homes remained unsold for at least 60 days.
• In October 2020, compared to the same month in the previous year, the S&P CoreLogic Case-Shiller monthly price report revealed a 3.6% increase in national prices.

The housing market is experiencing a surge in supply, but the bad news is that a significant portion of it is old and unsold for an extended period.

A new report from Redfin shows that active listings in November 2023 were 12.1% higher than in November 2023 and reached their highest level since 2020.

In November 2020, more than half of homes (54.5%) remained unsold for at least 60 days, which is the highest share since 2019 and a nearly 50% increase from the previous year, according to a report.

Since 2019, the typical home that went under contract took 43 days to do so, according to Redfin.

"Redfin agent Meme Loggins stated in a report that many listings on the market are stale or uninhabitable, despite there being a lot of inventory. According to Loggins, homes that are priced well and in good condition sell quickly, within three to five days, while overpriced homes can sit on the market for over three months."

Mortgage rates have remained above 7% since October, while home prices have continued to increase, according to Mortgage News Daily and S&P CoreLogic Case-Shiller's latest monthly price report, released Tuesday, which showed a 3.6% increase in national prices compared to the same month last year.

"Our national index has shown continued improvement with the latest data covering the period prior to the election, according to Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. The removal of political uncertainty risk has led to an equity market rally, and it will be telling should a similar sentiment occur among homeowners."

In November, pending home sales increased both monthly and annually to their highest level in nearly two years, according to the National Association of Realtors. Despite this, they were still coming off a very slow base. The Realtors assert that interest rates are now at a new normal.

"Lawrence Yun, NAR's chief economist, stated that consumers have adjusted their expectations about mortgage rates and are taking advantage of the increased inventory. For the past 24 months, mortgage rates have averaged above 6%. Buyers are no longer waiting for or expecting mortgage rates to decrease significantly. Additionally, buyers have a stronger negotiating position as the market moves away from a seller's market."

Despite the slower selling pace, there is still demand for homes. However, renters are staying put longer due to the higher home prices and costs associated with moving and brokers.

In 2024, the lock-in effect among sellers who were hesitant to trade their low mortgage rates began to ease, according to a year-end report from CoreLogic. However, this was mainly due to life events or the need to tap accumulated equity, rather than the added inventory. Despite the increased inventory, costs remained a significant barrier to sales.

The persistent increase in housing prices and interest rates has made it difficult for buyers to keep up, according to Selma Hepp, CoreLogic's chief economist, in a report.