The housing market may be taking one step forward—and two steps back.
In a sign that the hot housing market is getting a little better for buyers, more homes hit the market in June, according to a recent Realtor.com® report. However, prices continued to soar, reaching a new all-time high.
The number of new listings for sale increased 10.9% in June compared with a month earlier—and were up 5.5% annually.
However, the overall number of homes for sale was down 43.1% from June of the previous year, when the nation was already in the throes of a housing shortage.
The dearth of properties for sale boosted median list prices 12.7% year over year, to reach $385,000. While prices may be higher, the rate of price growth has slowed. In May, prices were up 15.2% compared with the previous year.
“It’s a shift away from an overheated market to a new normal,” says Realtor.com® Senior Economist George Ratiu.
“More homeowners are deciding to put their homes on the market, encouraged by vaccines, a stronger economy, and low mortgage rates,” says Ratiu. “What this means is buyers will have more choices at more affordable prices.”
The housing shortage has been a problem in the years leading up to the COVID-19 pandemic, but hit crisis proportions over the past year. This resulted in record-high asking prices and bidding wars driving the price tags to new heights. Median list price increases were the highest in Austin, TX, where they rose 34.3% from last year, to $524,000.
Nationally, homes are also selling faster, lasting just 35 days on market. That’s two days shorter than in June 2020.
The picture was rosier in the 50 largest metropolitan areas, where 11.7% more new listings came onto the market in June compared with last year. Milwaukee gained the most new listings, at 44.7%, followed by Silicon Valley’s San Jose, CA, at 40.7%, and Cleveland, at 37.9%.
“We’re going to see more homes come to the market as we move through the summer into the fall,” says Ratiu. “More first-time buyers will see much more approachable prices as the number of homes increases.”