One of the greatest challenges facing home buyers in recent years is that there simply haven’t been enough properties available on the market. Low inventory drives competition and increases home prices, which pinches buyers already strained by high mortgage rates.
The welcome news is that home inventory is showing signs of a rebound. Housing Wire reported last week that the U.S. had an inventory of 668,383 homes for sale. That’s up from a low of 240,000 in March 2022, when mortgage rates began climbing after the historically low rates of the pandemic triggered a buying frenzy.
To put the current figure in context, the U.S. had an inventory of 1,202,801 active listings during the same week of July in 2015.
“While (the current inventory) is still far from average, it’s a huge plus that we are no longer in a savagely unhealthy low inventory market in parts of the country,” Housing Wire’s Logan Mohtashami wrote.
Part of what’s contributing to the growing stock of homes is a sluggish sales pace. Sales of existing homes fell by 5.4% in June as prices continued rising. The median home price rose to new record high of $427,000.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” said Lawrence Yun, chief economist for the National Association of Realtors. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
Each of the four major regions of the U.S. posted sales declines in the last month. And year over year, only the West avoid a drop in sales.
Ali Wonda, chief economist at Zonda, told Marketplace the growth in inventory reflects homeowners adjusting to economic climate. Many waited to list their homes for sale to see whether circumstances would improve on the buyer side as they search for new homes.
“I think the more time goes by, the more homeowners and sellers acclimate to the current rate environment,” Zonda said. “And if someone’s retiring, if someone’s having a second child, if someone’s getting married, they may need to sell their home even if they’re reluctant to reset their 3% interest rate.”
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