The ongoing issue that has sparked price increases and incredible competition finally received some relief last month. Housing supply increased 5.5% year over year in June and up 10.9% compared to May. The increase of supply may mean a cooldown on home prices, says CNBC. And some cities even posted a 20% or more increase in housing supply compared to the same time last year. It’s an unusual event as listings typically drop between May and June after the spring buying season, but the housing market has yet to perform “normally” since the pandemic began.
“The improvement we saw in new listings growth from May to June shows sellers are entering the market historically later in the season, which could mean we’ll see home buying continue into the fall as buyers jump at new opportunities,” added Ratiu.
The unexpected new supply is certainly welcome news for homebuyers, many of whom have been sidelined in bidding wars, but the market is still extremely lean. The inventory of homes for sale was down 43.1% year over year at the end of May, representing 415,000 fewer homes for sale on a typical day in June. That is, however, an improvement from the more than 50% declines seen in March, April and May. New listings, again, were higher, but still well below the pre-pandemic average for June.
Still, the new supply is giving some frustrated buyers more to choose from. In Washington, D.C., where the market is extraordinarily tight, it has been common to see most listings sell within a week or two for well over asking price. New listings were up 36% in June from a year ago, but total supply is still down 9%.
“What I’m seeing is the market is easing ever so slightly,” said Jennifer Myers, founder and owner of Dwell Real Estate Brokerage. “That means that more people are going under contract for their next home, which in turn means more listings are coming up because those people are now able to sell their current home. Little hinges swing big doors, as they say.”
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