Housing inventory rebounds at record rate in largest metros, but Chicago lags behind
The number of homes available to buyers climbed 18.7% in June, the sharpest year-over-year increase in the history of the Realtor.com Monthly Housing Trends Report.
While active listings increased, so did prices. The median home price in the report increased 16.9% to $450,000, compared to June 2021.
In the Chicago-Naperville-Elgin region, the median listing price increased 2.8% year over year to $365,000, while active listings declined 13%, bucking the national trend.
Compared to June 2021, active inventory increased in 40 of the 50 largest U.S. metros, led by Austin, Texas (+144.5%), Phoenix (+113.2%) and Raleigh, N.C. (+111.7%).
“While we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices,” Danielle Hale, chief economist for Realtor.com, said in a news release.
Inventory Sees Growth Amidst Moderating Demand
Nationally, the inventory of homes actively for sale on a typical day in June increased by 18.7% over the past year, the largest increase in inventory in the data history. This amounted to 98,000 more homes actively for sale on a typical day in June compared to the previous year. While overall active housing inventory grew year-over-year, the inventory of condos (along with other attached home types) listed for sale shrank by -0.2%. Condos, which made up 20.2% of listings in June, tend to be lower-priced than single-family homes (17.5% cheaper on average in the 50 largest metro areas in June 2022) and have therefore gained popularity in high-priced locales as single-family home prices have climbed in recent years. The total number of unsold homes nationwide—a metric that includes active listings and listings in various stages of the selling process that are not yet sold—was still down 1.4% percent from June 2021. However this has improved from last month’s 3.9% decline.
The lagged improvement in the total number of homes for sale is due to moderating buyer demand, spurred by rising interest rates and all-time high listing prices that have increased the cost of financing 80% of the typical home by 57.6% ($745 per month) compared to a year ago. The number of pending listings on a typical day (listings that are at various stages of the selling process that are not yet sold), has declined by 16.3% compared to last June, indicating that a moderation in demand is also softening the rate of turnover in inventory. This is a further deceleration from the 12.6% annual decline we reported for May. For homebuyers who are still actively searching for a home, lower competition and more seller activity will provide some relief.
Some Metros Are Seeing Time on Market Increase, but in Most Homes Are Still Selling More Quickly
The typical home spent 32 days on the market this June which is 4 days less than last year. Homes spent 27 fewer days on the market than typical June 2017 to 2019 timing.
In the 50 largest U.S. metros, the typical home spent 28 days on the market, and homes also spent 2 fewer days on the market, on average, compared to June 2021. Among these 50 largest metros, the time a typical property spent on the market decreased most in large metros in the South (-4 days), followed by the Northeast and West (-2 days), and the Midwest (-1 day).
Ten of the 50 largest metros saw time on market increase compared to the previous year, and six saw no change in time on market year-over-year. Among these larger metropolitan areas, homes saw the greatest yearly decline in time spent on market in Miami (-22 days), and Hartford (-8 days). Atlanta, Jacksonville and Orlando all tied with the typical home spending 7 fewer days on the market than the previous year. Austin saw time on market increase the most, by 6 days, while Denver and Detroit tied with the typical home in each of these metros spending 4 more days on the market than the previous year.
Listing Prices Are Still Rising, Newly Listed Homes Are Larger
The median national home price for active listings grew to a new all-time high of $450,000 in June. This represents an annual growth rate of 16.9%, a slight deceleration from last month’s growth rate of 17.6%. However, the median listing price for a typical 2,000 square-foot single family home rose 21.6% compared to last year, similar to last month’s 21.5% increase.
Given growing supply and softness in sales and pending listings, the median listing price deceleration is signaling that seller expectations may be beginning to adjust to shifting market conditions. However, the slight price deceleration relative to the sizable (-16.3%) decrease in pending listings (signifying reduced demand) suggests that the median list price is impacted by other factors in addition to demand. The share of newly listed smaller homes (up to 1750 square feet) declined from 47.3% last June to 45.7% this June, while the share of homes larger than 1750 square feet increased from 52.7% to 54.3%. Because of these newly listed homes, larger, more expensive homes make up a bigger share of what’s for-sale this year than last year, leading to slower price deceleration than expected based on softening demand. In addition, the median list price of listings in pending status–those homes for which the seller has already accepted a buyer’s offer to purchase–decelerated, from a year-over-year rate of 16.2% in May to a growth rate of 13.9% in June. This indicates that the homes which buyers are choosing to buy tend to be less expensive, and also suggests that sellers have started to adjust their expectations to market conditions.