The worsening imbalance between supply and demand has pushed buyers to the brink, as many are unable to keep up with explosive home price growth compounded by fierce bidding wars. However, realtor.com’s weekly housing market report published on Thursday hints some much-needed help may be on the way.
“The bright spot for buyers this week is that new sellers continue to list homes for sale and this not only means fresh options to choose from, it is helping to slow the pace at which for-sale inventory is shrinking,” the report read.
New listings increased 18 percent year over year during the last week of April — a 13 percent increase from the annual gains during the first two weeks of March. Although last week’s growth is a slight slowdown from the two previous weeks where new listings peaked at 40 percent, realtor.com Chief Economist Danielle Hale said it’s still a positive sign that more homesellers are entering the market.
“The pandemic’s impact one year ago was most visible in new listings. Many sellers chose to delay selling homes early on as uncertainty was high and this was reflected in the number of new sellers coming to market,” Hale said in the report. “Now, we’re seeing the number of sellers jump compared to very low year-ago levels. This is not only expected, it’s needed.”
The modest boost in new listings has cooled median listing price growth from 17.2 percent to 15.4 percent. If the real estate market follows historical trends, Hale said, buyers could experience a bigger break sometime this fall.
“If home prices cool this year, as they have historically in the second half of the year, we’ll see some further slowing in the rate of price growth, but compared to last year, home prices are unmistakably higher,” she explained.
Although this week’s report revealed a silver lining, the battle for inventory is far from over as total active inventory is still down 52 percent year over year, and days on market declined by 25 days. “These fast-moving conditions can be challenging, especially for first-time homebuyers,” the report read.
Hale said it will take at least 12 months for inventory to rebound to a “relatively more normal” level, which will lift some, but not all, of the financial burden buyers are experiencing.
“In April, we were still seeing only 3 new sellers this year for every 4 we would have seen in April in the relatively more normal 2017 – 2019 period,” the report read. “As more sellers gain confidence and return to the housing market, we’ll see the scales tip back a bit in favor of buyers.”
“In fact, our recent survey shows that more homeowners than normal are planning to list their homes for sale in the next 12 months,” it added. “Despite this, most markets are expected to remain solidly seller’s markets for the rest of the year.”