Active listings posted a record-high growth rate in July, an indication that balance is returning to the housing market, Realtor.com reported.
July’s Monthly Housing Trends Report found that the national inventory of active listings rose by 30.7% YOY, while the total inventory of unsold homes, including pending listings, increased for the first time since September 2019.
This means there were 176,000 more homes actively for sale on a typical day in July than at the same time last year.
However, the bump in total unsold inventory amounted to only a modest 3.5% due to a dip in pending inventory. And listings are still far behind their pre-pandemic and even early pandemic levels. Active listings were 15.7% below 2020 and 45.4% below 2017-2019 averages.
Affordability challenges are contributing to a drop in demand. Median list prices increased by 16.6% in July, inching close to an all-time high.
At the same time, newly listed homes fell by 2.8% YOY as consumers begin to sense that buyers are backing away from the market.
Home purchase sentiment hit its lowest level in a decade this week, and the number of consumers who believe it’s a good time to sell a home has fallen, though remains above 60%.
“Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
“With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop. “
Buyers choosing to wait out the affordability crisis have contributed to “stale” housing supply increasing for the first time since the beginning of the pandemic.
The share of U.S. homes that were listed for 30 days without going under contract jumped 12.5% YOY in July, with 61.2% of for-sale homes on the market for at least that much time.
“People want to know whether we’ve officially shifted from a seller’s market to a buyer’s market. While there’s not a clear line separating those two ideas, homes sitting on the market longer is a point in buyers’ favor,” said Redfin Deputy Chief Economist Taylor Marr.