Housing Market Inventory Increase
Over the past month, we have finally seen an increase in for-sale homes in the United States. This is the first rise in for-sale homes in the United States since 2019, showing signs of a housing market that may finally be slowing down. Home listings in May from May of the prior year increased for the first time since the month of June in 2019. The data from realtor.com shows that supply may be hitting a turning point starting last month. The housing market inventory increase we saw is a good sign for buyers going forward.
Listings Are Ticking Up
The number of listings that are actively on market rose by 8% in the year from May 2021 to May 2022. This is probably driven by new sellers and a slowdown in the current demand. The Federal Reserve was adamant about being able to control the demand-side narrative, and it looks like what they are doing is working. A slowdown in buyers is likely because of deterrents that include higher housing prices alongside higher mortgage rates. The largest increases that were seen were in the West and the South, with cities including Austin, Texas and Phoenix, Arizona.
However, while an uptick in housing inventory is a welcome sign, there is still an underlying problem in real estate. The slight 8% increase is nice to see, but we are a long way away from a buyer’s side market. This increases doesn’t necessarily mean that we are in the clear from here on. The housing market exuberance is slowing, but does not mean that demand is softening enough. Listings are still below there May 2020 levels by close to 50%, at 48.5% exactly. Also, we have seen a record increase in prices at a record rate, as March year-over-year price increases came in at 20.6%.
Housing Market Inventory Increase From Experts
According to the chief economist at realtor.com, this is not necessarily the end-all be-all to our housing crisis. She mentions this when talking about inventory:
“While this real estate refresh is welcome news in a still-undersupplied market, it has yet to make a dent in home price growth.”
Nonetheless, a jump in mortgage rates and prices, alongside a weakening economic outlook may have hindered demand. The economic outlook has deterred many buyers and sellers from moving, as there is no where to go as borrowing costs are skyrocketing. Something to watch out for to test the real state of the real estate market is: price reduced. The rate of sellers making price cuts accelerated in May 2022.