Rising Listing Inventory in Riverside Metro

Riverside-San Bernardino-Ontario metropolitan trends: Home listing inventory has almost doubled from 4,173 to 8,071 over the past year; the median home list price cut averaged -18.7% off of recent peak highs; and the total percentage of unsold listing inventory as a percentage of all homes remains near a fairly good 0.5% number through the end of February 2023, as per Realtor.com and Reventure Consulting.

Let’s review the national home listing trends dating back to 2016:

Month and Year Home Listing Count
July 2016 1,463,302
July 2017 1,319,532
July 2018 1,258,756
July 2019 1,236,394
July 2020 818,801
July 2021 542,884
February 2022 344,462 (listing low)
July 2022 688,772
February 2023 577,972
March 2023 562,565*
Source: St. Louis Fed
*The national home listing supply fell again last month in March partly due to falling mortgage rate averages in recent months.

Approximately 75% of all homes nationwide were purchased with mortgages in recent years. Almost every boom and bust housing cycle over the past 50+ years was directly related to mortgage rate trends.

Between April 1971 and September 2022, the average 30-year fixed mortgage rate was 7.76% as per Freddie Mac. Today's rates for borrowers with average FICO scores near 690 have fluctuated between 6% and 8% APRs in recent months. The main difference today is that mortgage balances are two, three, four, or five times larger than in decades past.

We’re in the midst of the fastest mortgage rate increase in US history. The Federal Reserve's rate hikes at a record pace over the past year are likely to later pivot and become massive rate cuts at some point in the future like we saw shortly after the 2008 housing bubble burst.

For comparison purposes about rate hikes, the Fed increased rates 17 times between June 2004 and June 2006 while pushing rates from 1% to 5.25% over 24 months while much smaller rate hikes that were closer to .25% at a time. This was the catalyst for the housing bubble burst later as so many adjustable rate option-like pay ARM mortgages and HELOCs doubled or tripled in monthly payment amounts.

Between the 1st quarter of 2022 and the 1st quarter of 2023, we’re on pace to increase rates 4.25% just like during the 2004 to 2006 era while doing it in about half the time (12 months instead of 24 months). www.realloans.com