Housing inventory rebounded in June, rising 2% across the country, according to a new report from Redfin.
This is the first annual inventory increase since July 2019.
Rising mortgage rates, home price appreciation, and a looming recession have pushed some potential homebuyers to the sidelines. Home sales were down almost 16% YOY, the largest drop since May 2020.
“The country’s economic woes have already cooled the housing market, and they’re likely to continue dampening demand,” said Redfin Chief Economist Daryl Fairweather.
“The Fed has signaled it may increase interest rates further to combat stubbornly high inflation, which could harm consumer confidence, and lower stock prices mean fewer prospective homebuyers can afford a down payment.”
Housing affordability is at its lowest point since 2006. This is particularly damaging for first-time homebuyers, who have less capital than older buyers and no equity to give them a boost.
“Central bankers giveth and central bankers taketh away,” Neil Shearing, chief economist at Capital Economics, told The Street.
“It was their low-interest rate policies which helped fuel an extraordinary – and extraordinarily global – rise in house prices. As a generational rise in inflation brings that low-rate era to a rapid close, our earlier warning that housing markets would prove most vulnerable to policy tightening is becoming a reality.”
June’s fastest markets were Denver and Indianapolis, where half of all listed homes found a buyer in five days. Grand Rapids, MI, Omaha, NE, and Oklahoma City tied for second, with homes spending an average of six days on the market.
Rochester, NY, had the most competitive market in June, with 80.5% of homes selling above list price, followed by Worcester, MA (76.8%), Oakland, CA (76.2%), Buffalo, NY (75.4%), and Hartford, CT (75%).
The South continued to dominate price growth, with North Port, FL, seeing the biggest gains (+29.7%), followed by Cape Coral, FL, (+27.7%), Tampa (+26.1%), Fort Worth, TX (+24.2%), and Knoxville, TN (+24.1%).
San Francisco was the only metro where prices fell in June, down 0.5%.