Economists' Outlook

Housing stats and analysis from NAR's research experts.

Multiple Offers Ease as Affordability Is Further Eroded

It is always good to know where we are with the real estate market, but it is essential to keep all data in a historical perspective. The monthly REALTORS® Confidence Index helps dispel many myths and cut through the noise of what is currently happening in the market.

The monthly report is released with NAR Existing Home Sales and provides a narrative account of the housing market. Specifically, the reports answer who buyers are, how they are making purchases, and where. The report addresses sellers' experience with offers, days on the market, and contingencies.

As reported in the latest NAR Existing Home Sales data, inventory remains in tight supply, which means homes are still moving at a fast pace despite the recent rise in rates and home prices. The median days on the market is just 16 days—however, this is up from 14 days the two past months. In comparison, in 2011, homes took 96 days to sell.

Line graph: Median Days on the Market, May 2011 to May 2022

Notably, the market has contracted as fewer buyers can afford to purchase in today's market, but in many areas of the country, the market does remain a seller's market. For every home that was listed, there were 2.5 offers. This is down from the frenzied market from April of this year when every house listed had 5.5 offers.

Line graph: Average Number of Offers Received on Most Recent Sale, October 2015 to July 2022

One way to understand the market's competitiveness is to look at buyers waiving contingencies. While this data series is shorter, it reflects a slight ease that mirrors the number of offers for every home. Nearly one-third of buyers waived an inspection or appraisal contingency, but the last month it fell just over 20% for both.

Line graph: Buyers Waived Contingency, April 2021 to August 2022

It is important to note that nearly one-quarter of the home buying market is paying all cash, which would mean they do not need to have an appraisal contingency. All-cash buyers now stand at 24%. The last high among all-cash buyers was seen at 35% in 2014.

Line graph: All-cash Buyers, October 2008 to July 2022

Another measure of the housing market is whether a REALTOR® had a client who had a distressed sale in the last month. Due to the consistent rise in home prices, homeowners typically do have equity in their homes. Distressed sales are not common today. In 2008, 49% of REALTORS® had a client with a distressed sale; today, it's only 1%.

Line graph: Distressed Sales (Foreclosures or Short Sales), October 2088 to July 2022

Non-primary residence buyers are now at 16%, up from 14% last month. While this is a recent climb, the data has monthly volatility. This is down from a series high of 22% in January 2022.

Line graph: Non-primary Residence Buyers, October 2015 to July 2022

Unfortunately, the share of first-time buyers remained suppressed at just 29% last month. While it is not the high seen in 2010, when the First-time Home Buyer Tax Credit existed (and when there was considerable inventory in the housing market), it is also not the historical norm of 40% seen in the annual Profile of Home Buyers and Sellers report. The first-time buyer share will likely continue to be impacted by the rise in interest rates eroding housing affordability.

Line graph: First-time Buyer Share, October 2008 to July 2022

To read more on the monthly REALTORS® Confidence Index, check out the full report the same day existing-home sales data is released.