For-Sale Home Supply Hits Another Historic High

Active for-sale housing inventory ticked up 18.7% year over year, the fastest annual pace recorded, while national median listing prices also hit historic highs.

The median home in the US was listed at $450,000, according to Realtor.com’s monthly housing trends report for June released this week. That’s a nearly 17% increase over June 2021 numbers and a 38.5% uptick over June 2019.

But “at the same time, a number of June trends indicate that sellers are beginning to compete for fewer buyers who have more options,” the company notes. “Both active and pending listing prices posted smaller yearly gains than last month, while the share of total inventory with price reductions increased.”

Inventory recovered from last year’s declines as new listings picked up and demand moderated. While more new sellers are listing in a bid to take advantage of the continuously hot housing market, buyers are increasingly being priced out of the market as rates and prices climb. Typical mortgage payments are now up 58% from a year ago.

Realtor.com also noted that there are still fewer than half (-53.2%) as many for-sale homes compared to June 2019.  Pending listings declined by 16.3% year-over-year, while new listings increased by 4.5% over June 2021 numbers. Active inventory increased in 40 of the 50 largest U.S. metros, led by Austin, Texas (+144.5%), Phoenix (+113.2%), and Raleigh (+111.7%) while June’s biggest new listings gains were all in markets across the South, with Raleigh (+37.6%), Nashville, Tenn. (+37.2%) and Charlotte, N.C. (+30.1%) leading the way.  Las Vegas also won big in the latter category, with a nearly 35% increase.

Realtor.com analysts also noted an increase in larger, more expensive homes as a share of new listings and said that metric could be why overall asking prices continue to soar despite moderating demand. In June, homes with at least 1,750 square feet accounted for more new listings (54.3%, up from 52.7% in 2021) than relatively smaller homes (45.7%, down from 47.3% in 2021). 

Finally, month-to-month data for June shows that the overall time on market grew from the prior month for the first time since 2019.

“While we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices,” said Realtor.com Chief Economist Danielle Hale. “However, a deeper dive into June’s inventory gains by square footage reveals potential opportunities for move-up buyers, as newly-listed homes skew larger. In other words, this first wave of supply improvements may be particularly opportune for summer sellers looking to upgrade from their starter homes.”

Hale recently sat down with CNBC to talk about the state of the housing market, noting that “it’s fair to say that the increase in mortgage rates, combined with the increase in prices that we’ve seen, are making homes much more expensive for buyers in the market today.”

“That is some sticker shock for buyers in the market, but homeowners are well qualified,” Hale told the outlet. “We expect to see home sales to continue, just at a slower pace than we’ve seen over the last couple of years.”

Research from CoreLogic predicts that rising mortgage rates will likely slow buyers’ demand in the near term. The firm forecasts annual home price appreciation to slump to 5.6% by next April, whereas prices ticked up by a total of 20.9% year-over-year in April 2022.