Inventory and New Listings Looking for Balance in Single-Family Home Market

The US inventory of active listings increased 30.7% year-over-year, faster than ever before in Realtor.com’s data history. However, slowing in the number of new listings – it actually declined – has left the housing market seeking to find balance, according to its chief economist Danielle Hale. 

Inventory was up significantly in June and May, but July’s data suggests “that some prospective sellers are wondering what recent market shifts mean for their plans to list.” But data indicates that homeowners grappling with this decision are still in a good position in many markets, with buyer interest keeping well-priced homes selling quickly.

Hale said that because many sellers have a substantial equity cushion to leverage, thanks to the past decade of rising prices, whether they take advantage of these opportunities will be key to inventory trends moving forward.

Might Be Until 2023 to ‘Get to Normal’

Bill McBride of the Calculated Risk blog said his current outlook on house prices assumes that inventory will continue to increase into fall.

“I’ve been expecting inventory to return to 2019 levels in early 2023 with low demand and some normal levels of new listings,” McBride wrote Monday. “However, it is possible that it might take much longer to return to more normal inventory levels – inventory will tell the tale”

Heat Might Have Caused Big Drops in Northeast, Midwest

Realtor.com said that nationally, newly listed homes were down 2.8% compared to July 2021, with the biggest drops registered in the Northeast (-14.3%) and Midwest (-11.0%). It also suggested that record heat in July for much of the country might have played a role in the decline of new listings.

The typical home spent 35 days on the market in July, down two days year-over-year and 26 days from the 2017-2019 average, according to Realtor’s report.