Newly-Listed Homes Are Rising With Smaller Units Leading The Way

Newly listed homes have grown for two months in a row with smaller units leading the way, according to Realtor.com’s Monthly Housing Report.

More new sellers entered the market in July (+6.5% year-over-year), more than June’s 5.5% increase year-over-year, said the trade group, noting newly listed homes typically decline from June to July, but this year they held steady at -0.6% over June.

In a move that should help first-time buyers, the share of smaller homes for sale (those between 750 and 1,750 square feet) increased in July to 36.3% from 30.2% a year earlier.

During the same period, the inventory of homes having between 3,000 and 6,000 square feet decreased from 24.2% to 20.1%.

With prices, Reator.com said US median list price held steady at last month’s record-high of $385,000, up 10.3% year-over-year, but down from June’s growth of 12.7%.

While gains have been made in the volume of homes on the market this summer, they are still down about a third (33.5%) from July of last year.

“July housing trends show a market still working its way back toward some version of normal. The feverish pace of home sales is beginning to follow historical seasonal patterns, while new listings grew at an unusually high rate for the summer months, further helping the inventory crunch,” said Realtor.com Chief Economist Danielle Hale.

He added the greater number of smaller homes for sale compared to larger ones is shifting the housing market balance in a more buyer-friendly direction, but buyers may not see as much price moderation as suggested by the national trend because it’s partly attributed to a shift toward smaller homes for sale.

He predicted a wave of real estate activity heading into the latter part of the year if these changing inventory dynamics continue.

Last month, Redfin said the number of homes listed for sale surpassed 2019 levels for the first time since the start of the year.

New listings of homes for the four weeks ending July 4 were up 4% from a year earlier. They were also up 3% from the same period in 2019. This was the first time new listings have surpassed 2019 levels since the beginning of the year.

Even though more homes came on the market, demand began to slip. Redfin Chief Economist Daryl Fairweather says many buyers have backed away from the housing market and are waiting for more homes to be listed.

“Buyers don’t have the same sense of urgency that they did at the beginning of the year,” Fairweather said.