Supply is starting to catch up to demand in the U.S. housing market.
The inventory of active listings surged 29% annually in the week ending Saturday, according to a report Thursday from Realtor.com. In addition, new listings rose 8% year over year.
“As we close out what is typically the busiest week of the year for home sales, we’re starting to see more and more sellers come to the market and the number of homes for sale climbing back toward pre-pandemic levels,” Danielle Hale, Realtor.com’s chief economist, said in the report. “In other words, buyers are seeing more options.”
However, the market remains “relatively under-supplied,” she added, with the number of active listings still only about half of what was on the market in June 2019.
“Of course one contributor to the rise of options for shoppers is that some searchers are putting plans on pause,” Ms. Hale continued. “Even though mortgage rates have taken a breather, they remain substantially higher than a year ago, shrinking buyer purchasing power enough to derail some plans to purchase.”
So far, the outlook for the rest of the year is good, Ms. Hale noted. The rise in mortgage rates may have inspired some sellers to list, and “both new and pending home sales saw an uptick in May when expectations of higher future mortgage rates were climbing,” she said. “However, if the recent pause in mortgage rates lingers, home shoppers could lose some sense of urgency, especially as their options grow.”
Meanwhile, prices keep going up. The median listing price was $450,000 in June, an 18.3% jump compared to the same time last year. That marks the 29th consecutive week of double-digit increases and is yet another record high for home prices in the U.S.
“This week’s growth rate picked up after several weeks of steady to slower year-over-year growth, and we expect that data quirks around the independence day holiday are playing a role. Because of this, we expect to see home price growth ease back lower in the weeks ahead and continue to slow in the second half of 2022,” the report said.
Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp.