Inventory of Homes for Sale Continues to Rise

The number of homes actively for sale nationwide has grown by 36.6% for July 2024. Sellers have been encouraged to list 3.6% more homes compared to the same period last year, even though the median price of homes remained stable at $439,950.

July marked the ninth consecutive month when the supply of homes for sale increased. They spent on average 50 days on the market – the slowest rate since 2020 — giving would-be buyers five extra days of breathing room to think about making a final offer to purchase.

“The market cooled considerably as the housing market began to exit the peak buying season and expectations for mortgage rate reductions rose,” according to the report. “While the median list price nationwide stayed the same as last year, homes continue to see a modest price increase on a per square foot basis.”

Indeed, the median price per square foot grew by 3.1%. This indicated, the report said, that the inventory of smaller and more affordable homes has risen as a share of the market.

The total number of unsold homes, including ones that are under contract, increased by 22.6% compared with July 2023. The share of listings with price cuts rose to 18.9%, an increase of 3.4 percentage points compared to the prior year. Even so, July 2024 inventory was 30.6% down compared to pre-pandemic levels. However, that was an improvement on the 31.2% gap in June.

The inventory of homes in the $200,000 to $350,000 price range showed the biggest growth, rising 47.3% from July 2023 levels, especially in the South.

Even though mortgage rates fell in July, the report hinted that some house hunters may be holding out until September in hope that the Fed will then lower interest rates. It predicted that sales may continue to normalize as rates continue to decline.

“In July, all four regions saw active inventory grow over the previous year,” the report noted. “The South saw listings grow by 47.6%, while inventory grew by 35.4% in the West, 22.7% in the Midwest, and 14.7% in the Northeast.

“In the South, where the growth in home inventory has been the largest, the typical home spent six more days on the market in July compared with last year, while out West homes are staying on the market two days longer.” Time on the market was unchanged in the Midwest but one day less in the Northeast.

All of the nation’s largest metros saw the number of homes for sale rise in July. The highest increase was in Tampa (up 95%), followed by Orlando (up 78.7%) and San Diego (77.7%). Inventory levels, however, generally remained lower than before the pandemic, though 12 of the top 50 metros had higher numbers than before the pandemic, led by the South and West.