SANTA CLARA, Calif.–For the first time since June of 2019, the inventory of homes for sale has increased for the first time, which Realtor.com is calling a “major turning point in inventory.”
The national inventory of active listings increased by 8.0% over last year, while the total inventory of unsold homes, including pending listings, still declined by 3.9% due to a decline in pending inventory, Realtor.com stated.
“The inventory of active listings was down 48.5% compared to May 2020 in the early days of the COVID-19 pandemic. In other words, there are still only half as many homes available,” Realtor.com reported. “
“Sellers are fueling this turnaround in inventory, with newly listed homes entering the market at a rate not seen since 2019,” the analysis continued. “However, moderating demand is also playing a role, with pending listings declining compared to last year. Nonetheless, homes are still spending less time on the market compared to last year and prices are still rising, partially driven by an increase in newly listed larger homes and slow adjustments to seller expectations.”
Nearly 40,000 More Homes
The 8% increase in inventoryamounted to 38,000 more homes actively for sale on a typical day in May compared to the previous year, Realtor.com stated.
“The lagged improvement in the total number of homes for sale is due to moderating buyer demand, spurred by rising interest rates and all-time high listing prices that have increased the cost of financing 80% of the typical home by 48% compared to a year ago.” Realtor.com reported. “The number of pending listings on a typical day (listings that are at various stages of the selling process that are not yet sold), has declined by 12.6% compared to last May, indicating that a moderation in demand is also softening the rate of turnover in inventory. This is a further deceleration from the 8.7% annual decline we reported for April. For homebuyers who are still actively searching for a home, lower competition and more seller activity will provide some relief.”
Additional Data Points
Additional data points released in the most recent report include:
- The inventory of homes actively for sale in the 50 largest U.S. metros overall increased by 14.9% over last year in May. In the West, active listings grew most (by +33.6% year-over-year), followed by the South (+18.3%), Midwest (+5.8%), and Northeast (+1.1%). Large western metros saw new listings increase by an average of 7.2% compared to last year and in the South they grew by 6.6%. Northeastern (-1.1% year-over-year) and midwestern (-1.0% year-over-year) large metros were still seeing fewer newly listed homes compared to last year.
- Inventory increased in 42 out of 50 of the largest metros compared to last year. Metros which saw the most inventory growth include Austin (+85.8%), Phoenix (+67.1%), and Sacramento (+54.6%). Inventory is still declining on a year-over-year basis in eight markets, with Miami (-32.1%), Virginia Beach (-19.3%), and Richmond (-15.3%) still seeing the largest declines.
- Thirty metros also saw the number of newly listed homes increase compared to last year. The markets which saw the highest year-over-year growth in newly listed homes included southern and western metros such as Raleigh (+27.9%), Nashville (+22.4%) and Las Vegas (+20.7%). Markets which are still seeing a decline in newly listed homes compared to last year include Virginia Beach (-15.1%), Chicago (-10.0%), and Cleveland (-9.3%).
- The median national home price for active listings grew to a new all-time high of $447,000 in May. This represents an annual growth rate of 17.6%, an acceleration from last month’s growth rate of 14.2%. The median listing price for a typical 2,000 square-foot single family home rose 19.3% compared to last year, also an acceleration from 17.3% last month, Realtor.com reported.
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