Once real estate’s sleepiest month, January could be this year’s home-buying hot season, according to new data. That’s a status historically reserved for April.
Homebuyers are shopping earlier in the year, a trend that began in 2015. Last year, listing views peaked in February: If the trend continues in 2020, January could be the most competitive month for home shoppers, according to economists.
“It turns out that buyers who want to get a leg up on the spring shopping season have to start a lot earlier,” George Ratiu, Realtor.com’s chief economist, told Yahoo Finance’s “The First Trade” on Thursday. His firm analyzed new listing views, which are an indicator of demand among prospective homebuyers.
Statistics show that January has caught up to previous spring-heavy metrics. In 2015, January lagged behind April’s listing views by 16%. But by 2019, February topped listing views, with January trailing by only 1%.
In fact, January claimed the No. 1 spot for listing views in 20 of the top 100 markets in the U.S. in 2019, with Seattle, Wash., leading early-year demand.
Early-season activity stems from a tight market. Low housing inventory has made the home buying process a lengthy search, especially for first-time homebuyers. There were 9.5% fewer homes for sale in November than there were the previous year — and 16.5% fewer affordable homes under $200,000, according to Realtor.com.
“It turns out as demand for housing remains robust as we kick off 2020, with the inventory situation being as tight as it has been, and we’ve had five consecutive months of inventory declines,” said Ratiu. He noted that interest rates below 4% have compounded competition with a flood of motivated buyers.
But January has not replaced spring real estate fever: Frenzied demand will likely continue into spring 2020, said Ratiu.
In fact, seasonal differences are getting smaller altogether, reflecting constantly high demand. In 2018, a 21% gap stood between the most and least competitive months. Back in 2019, that gap lessened to only a six percent gap.
“The spring months remain as competitive as ever… a quarter of first-time buyers have spent over a year looking for a home. So for those folks, really, there’s little break in the buying season,” said Ratiu.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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