Inventory Rebound May Be On The Horizon

Active listings were down only 12.2% in April, its smallest YOY decline since December 2019, according to’s Monthly Housing Trends Report.

This suggests that inventory may be about to bounce back up after the crippling shortage of the last year.

Though new listings declined, the number of homes under contract saw a YOY decrease as well, closing some of the distance between supply and demand. Pending listings were down 9.5% YOY.

Improvements were seen in the share of mid-sized homes, adding to listings for families upgrading from starter homes and possibly easing the way for first-time homebuyers who have struggled to find affordable entry homes during the pandemic.

“April data suggests a positive turn of events is on the horizon for weary buyers: If the trends we’re seeing now hold true, we could potentially see year-over-year inventory growth within the next few weeks,” said Danielle Hale, Chief Economist for

“The key to this growth will be the continuation of softening buyer competition and an increasing number of sellers putting homes on the market. While home shoppers are still seeking relief from record-high asking prices and all-time low supply, when compared to the past two-plus years of double-digit annual inventory declines, an imminent rebound is welcome news – a real estate refresh, if you will. There’s a long uphill climb to balance, but it starts with heading in the right direction, and April data shows a lot of promise.”

Where are buyers seeing a glimmer of hope?

There are pockets of the country where more homes are being listed than there were before the housing market exploded in 2020 which is a good sign for buyers in those metro areas.

According to an article by Margaret Heidenry for, metros that saw the most new homes hit the market include Riverside, CA (+23.3%), Austin, TX (+16.5%), and Sacramento, CA (+11.8%).

Metros include the main city and surrounding suburbs, towns, and smaller urban communities, according to the article.

Compass Agent Paul Reddam in Austin told Heidenry it is hard to nail down what is causing inventory to loosen, but this is typically the peak of their real estate cycle.

Consumers across the country continue to report difficult homebuying conditions due to inflation, higher mortgage rates, and home price appreciation.

Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, said that in April their Home Purchase Sentiment Index fell to its lowest level since the spring of 2020.

The percentage of respondents who said it is a good time to buy a home decreased from 24% to 19%, while the percentage who said it is a bad time to buy increased from 73% to 76%.

As a result, the net share of those who say it is a good time to buy decreased 8 percentage points month over month, according to the survey.

“The current lack of entry-level supply and the rapid uptick in mortgage rates appear to be adversely impacting potential first-time homebuyers in particular, evidenced by the larger share of younger respondents (aged 18- to 34) reporting that it’s a ‘bad time to buy a home,’” Duncan said in a statement.

Some buyers are pulling out of the market until conditions improve for them.

Demand may decline further as other potential buyers are priced out of the market. Financing 80% of a home now costs almost 50% more than a year ago.

Softening competition can pave the way to fewer bidding wars and slower home price appreciation. New listings rose in April but still remain slightly below last year’s levels and 13% below typical levels for April in 2017-2019.

As construction delays continue, decreasing competition could be the best current path to reigning in home prices.