Historic Housing Shortage Showing Signs Of Letting Up
Redfin reports first single-digit drop in homes for sale since the pandemic.
Leading housing data trackers are suggesting that the housing market turned a corner in April as the inventory crunch showed signs of easing.
Real estate brokerage Redfin this week reported a 9% year-over-year decline in homes for sale—the smallest since March 2020 and the first single-digit drop since the pandemic began.
Redfin deputy chief economist Taylor Marr said, “when market conditions are changing it becomes more difficult for homebuyers and sellers to see eye-to-eye on pricing.”
A ‘Significant Change in Inventory’
“Tracking 35 markets in April, we are seeing a significant change in inventory, but no surge in new listings,” writes Bill McBride in the Calculated Risk blog.
“This means the increase in inventory is due to a decrease in demand, likely because of higher mortgage rates. On a national basis, we saw record low inventory levels over winter. Last year, inventory didn’t bottom seasonally until early April.
“This year inventory bottomed in February (normal seasonal timing). The next milestone will be when inventory is up year-over-year (YoY).”
Altos Research and Realtor.com have reported inventory is up year-over-year in May, but this data is for April.
McBride estimates that housing inventory has reached the seasonal bottom and NAR said inventory is down year-over-year by 10.4 percent.
New Listings Fell in 78 of 88 Markets
New listings fell from a year ago in 78 of the 88 largest metro areas. While inventory remained at a record low, it fell at a relatively slow pace because soaring mortgage rates tempered homebuyer demand, according to Redfin.
In the biggest drop since June 2020, home sales slid 8%, which allowed white-hot home-price growth to cool slightly. The median home-sale price rose 16% to $424,000, a slowdown from March’s 17% gain.
Home sales fell from the prior year in 87 of the 88 largest metro areas Redfin tracks. The biggest declines were in West Palm Beach (-30%), Anaheim (-26%) and Bridgeport, Conn. (-25%). The only metro where sales increased was Allentown, Penn. (+1%).