Let me walk you through what Realtor.com Research is tracking in their latest housing market outlook. The big picture they're painting is that we're still dealing with a significant shortage of homes across the country, with an estimated four million unit gap that needs to be closed. This supply challenge continues to shape everything happening in the market right now.
On the mortgage side, rates have climbed to 6.66% this week according to their reporting, and everyone in the industry is watching to see what Fed Chairman Kevin Warsh says at Jackson Hole and how that might influence where rates head next. That's the kind of pivotal moment that can shift buyer behavior pretty quickly.
The new home sales numbers they're reporting show some softness. Sales dropped both from the previous month and compared to the same time last year in July, with some meaningful declines on both measures. It's worth noting that new home demand is coming more from people moving in from outside metro areas rather than from folks looking to trade up within existing markets.
What I am seeing locally here in the Bay Area and East Bay is that this national shortage of inventory combined with sticky mortgage rates means our market remains fundamentally constrained. For buyers, it's a reminder that you're still operating in a seller-favoring environment, though the softness in new home sales suggests the pace of competition may be easing. For sellers, particularly those thinking about moving while rates are elevated, knowing that out-of-area buyers are more likely to pursue new construction might influence how you price and position your existing home in this market.
