The U.S. housing market, which has long-suffered from a drastically low inventory, saw total inventory increase at a record pace for the third month in a row, according to realtor.com®’s July Monthly Housing Market Trends Report. The rise in listings is largely attributed to a softening in demand, not an uptick in new construction, which has plummeted in recent months.
The national inventory of active listings shot up by 176,000 more homes or 30.7% over last year, a record-breaking growth rate, topping June’s record-setting growth rate of 18.7%, the report stated.
Despite recent decreases in mortgage rates, monthly mortgage payments are now more than double what they were this time last year, and many buyers are putting their plans on pause as a result, allowing active listings time to accumulate.
Even though there were more for-sale home options in July for buyers to choose from, competition remained largely in sellers’ favor. Listing prices remained at near all-time highs and homes sold more quickly than before the pandemic, the report stated.
Additionally, affordability concerns continued to drive up the rate of out-of-state buyers. From April to June, 53% of listings views on realtor.com® came from users located outside of the listing’s metro, up from 48% in the first quarter of 2021.
Report highlights:
- Nationally, newly listed homes were down 2.8% compared to July 2021, with the biggest drops registered in the northeast (-14.3%) and midwest (-11.0%).
- Relative to the national rate, active inventory grew at a faster annual pace (+41.0%) across the 50 largest U.S. metros in July, on average.
- More new sellers entered the market than last year in 13 of the biggest metros, with new listings jumping most significantly in Las Vegas (+37.6%), Nashville, Tenn. (+37.1%) and Oklahoma City (+28.6%).
- The typical home spent 35 days on the market this July which is just two days less than last year.
- The median national home price for active listings dipped slightly to $449,000 in July, which was down from a record high of $450,000 in June.
The takeaway:
“The U.S. housing market continues to move toward more evenly balanced supply and demand compared to the 2021 frenzy,” said Danielle Hale, chief economist for realtor.com®, in a release. “Our July data shows elevated mortgage rates left many buyers tightening their budgets and sellers responding with price reductions, while home shoppers who kept searching saw more available options. At the same time, new listings declined in July, suggesting that some prospective sellers are wondering what recent market shifts mean for their plans to list. But data indicates that homeowners grappling with this decision are still in a good position in many markets, with buyer interest keeping well-priced homes selling quickly. Plus, many sellers have a substantial equity cushion to leverage, thanks to the past decade of rising prices. Whether or not they take advantage of these opportunities will be key to inventory trends moving forward.”
Brendan Rascius is RISMedia’s associate editor. Email him your story ideas at brascius@rismedia.com.
