The massive housing shortage that started before the pandemic, and was then made worse by it, may finally be beginning to ease.
More supply is appearing on the market suddenly, which will undoubtedly help frustrated buyers and, in the long term, could take some of the heat off of home prices.
According to Realtor.com in June, new listings rose by 5.5% and 10.9% respectively year over year. The 10 larger cities with the highest number of new listings increased by 20% or more compared to last year were the most successful.
Our June data report indicates that buyers have good news, despite the fact that there’s still a lot of homes to sell and that home prices are at a record high.
As sellers entered the market with a variety price points across the country, inventory declined more than in the earlier pandemic.
It is not surprising that inventory has increased because most new listings fall between May-June, after the spring market. However, today’s housing market doesn’t follow the traditional rules. The pandemic caused unprecedented demand for larger suburban homes.
We noticed an improvement in the number of new listings between May and June. This suggests that sellers are entering market historically later in the season. It could also mean that we will see home buying continue into the autumn as buyers look for new opportunities.
Unexpected new supply is good news for homebuyers. Many have been left out in bidding battles. However, the market remains extremely tight. The inventory of homes on sale fell 43.1% over the past year, which is 415,000 less homes than were available on a typical June date. However, this is an improvement on the more than 50% declines that were seen in May, March, and April. Again, new listings were higher but still far below the June pre-pandemic average.
However, there is still more supply available for some buyers who are frustrated. The market is improving slightly. It means that more people have signed contracts to buy their next home. This in turn means there are more listings available because they are now able sell their home.
The month’s inventory, which is a calculation of how much has been sold compared to how much remains for sale, saw a slight increase, but not enough.
Housing boom will slowly recede if there are more homes on the market. It is unlikely that the housing boom will fall sharply or “bust” simply because of favorable demographics and historically low mortgage rates.
