April data suggests that US housing supply is set to rebound, with active listings posting the smallest year-over-year decline (-12.2%) since December 2019, according to Realtor.com.® is the last Housing Trends Monthly Report released this week.
Inventory improvements have been driven by the rise in the share of mid-size homes, which could mean more listings available for families looking to upgrade their starter home, which could, in turn , lead to increased call options for the first time, they mentioned.
Inventory charts an accelerated path to growth, led by mid-size family homes
In April, the supply of homes for sale in the United States showed multiple signs of accelerating improvement, as rising mortgage rates reduced the ability of some buyers to compete.
Although new listings were down year over year, the number of homes under contract also fell, suggesting that slowing demand is slowing the torrid pace of home sales.
As a result of these combined trends, the current listings gap over last year has continued to narrow, driven by the rising share of mid-size homes. That could mean more options available to families looking to upgrade and sell their first home, which, in turn, could potentially lead to an increase in critical first-time buyer inventory, the report says.
For any buyers still in the game, a continuation of these trends would likely mean earlier than expected relief from available options. Stocks could hit year-over-year growth by next month and begin the long road to full recovery from the COVID downturn.
Key additional findings from the report:
- The inventory of active listings in the United States fell 12.2% year over year in April, an improvement from March (-18.9%) and the smallest annual decline since December 2019 (-12.7%). Among this supply, the share of mid-size homes (1,750 to 3,000 square feet) posted the largest increase, up 2.34 percentage points year-over-year (see chart below). below).
- Nationally, pending listings were down 9.5% year over year, a potential side effect of moderating demand on the pace of inventory turnover. These trends reflect intensifying cost pressures buyers are facing, with the cost of financing 80% of listing a typical home up nearly 50% from a year ago.
- New listings gained momentum in April, but ultimately ended the month slightly below last year’s level (-0.9%) and 13.0% below typical April 2017 levels to 2019.
- Compared to the national rate, declines in current listings from April 2021 were relatively smaller in the 50 largest cities, on average (-10.3%), and reached positive territory in eight markets, led by Riverside, CA (+23.3%), Austin, Texas (+16.5%) and Sacramento, CA (+11.8%).
- Seventeen metros posted year-over-year gains in newly listed homes, led by New Orleans (+15.2%), San Antonio (+12.5%) and Denver (+11 .3%).
Time-on-market remains at an all-time high, but is approaching the pace of 2021
For buyers still in the market, the easing of competition provides much-needed relief from the torrid pace at which inventory is moving compared to last year. Homes continue to sell rapidly, at a record pace in April, but the gap over last year has narrowed. In fact, the annual rate fell by half starting in March. Conditions were relatively more competitive in the 50 largest U.S. cities, all of which saw annual declines in time-to-market, the report said.
Many of the metros where homes moved fastest over last year were in the Sun Belt area, which has become increasingly popular with potential out-of-state buyers.
Key additional findings:
- In April, the typical U.S. home spent 34 days on the market, down six days from last year and breaking the previous record set in June 2021 (36 days). However, the annual declines have moderated significantly from the March rate (-11 days).
- The average time on market in the 50 largest US cities was 28 days, six days less than last year. Regionally, the South saw the largest year-over-year declines in time spent in market (-9 days), followed by the West (-5 days).
- Metro-wide, homes moved at the fastest rate year over year in Miami (-29 days), St. Louis (-15 days), Raleigh, North Carolina (-14 days), Orlando , Florida (-13 days) and Hartford, Connecticut (-13 days).
Home prices hit a new high even as more sellers slash prices
Despite moderating demand, the median US home price hit a new all-time high and accelerated from March’s annual growth rate into April. The report notes that, while already high, this increase could be lower than some homebuyers have experienced, as medians can shift with the composition of inventory for sale. The April median reflects fewer large listings and more mid-size listings available compared to a year ago, with listing prices per square foot increasing at a relatively faster rate than the overall median, but moderating slightly from the March rate.
In another sign of some buyers tightening their budgets in the face of rate hikes, the share of sellers making price cuts increased year-over-year nationally and in the majority of major metropolitan areas.
More key indicators:
- The national median home price hit a new all-time high of $425,000 in April, up 14.2% year-over-year. While asking prices overall accelerated from last month’s pace (13.5%), the annual rate of growth declined in square footage, to 15.1% from 15.7% in March.
- Nationally, the share of homes receiving a price reduction rose 1.3 percentage points year-over-year to 6.9%, but still lagged usual levels from 2017 to 2019 (-9 percentage points).
- In April, listing prices in the 50 largest US cities rose at a single-digit rate (+9.5%), on average. However, asking prices per square foot increased by double digits (+12.3%) and approached the national rate overall.
- West (+14.5%) and South (+14.1%) metros top the list of biggest year-over-year price increases, up 22% or more in Miami, Las Vegas, Orlando, Florida, Tampa, Florida, Austin, Nashville, Tennessee, Jacksonville, Florida and Phoenix.
- In 40 of the 50 largest cities, the share of listings with price reductions in April increased year-over-year, by the highest percentage points in: Austin (+6 .8), Las Vegas (+5.3) and Sacramento (+4.7).
“April data suggests that a positive turn of events is on the horizon for weary shoppers: if the trends we are currently seeing continue, we could potentially see year-over-year inventory growth. another over the next few weeks,” said Danielle Hale, chief economist for real estate agent.com®. “Key to this growth will be continued weakening competition among buyers and more sellers putting homes on the market. As homebuyers continue to seek relief from record asking prices and historic supply weakness, compared to the past two years of annual double-digit stock declines, an impending rebound is good news – a real estate refresh, if you will.There’s a long climb to balance , but it’s starting to go in the right direction, and April’s data is very promising.
To view the full report, Click here.