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- The increase in larger, more expensive homes as a share of new listings is one reason that overall asking prices continue to soar.
- Other factors aiding the inventory rebound is the decline in pending listings (-16.3% year-over-year), which means fewer for-sale homes under contract with a buyer.
- New seller activity rebounded to 1% greater than its 2017-2019 pace, with new listings up 4.5% year-over-year.
- Affordability remains the number one obstacle of homeownership, but the typical condo sold for an average of 6.7% less than the typical single-family home in 2021.
According to Realtor.com’s June Housing Report, inventory recovery made major strides with the number of homes available to buyers climbing at its fastest annual pace of all time at 18.7%. The key factor driving up June’s active listings were new sellers who entered the market at a higher rate than in 2017-2019, prior to the pandemic.
Inventory recovery is accelerating, according to Realtor.com Chief Economist Danielle Hale, posting the second straight month of active listings growth in nearly three years. These improvements are expected to continue as predicted in the newly updated 2022 forecast.
"While we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices,” Hale said. “However, a deeper dive into June's inventory gains by square footage reveals potential opportunities for move-up buyers, as newly-listed homes skewed larger. In other words, this first wave of supply improvements may be particularly opportune for summer sellers looking to upgrade from their starter homes, which could mean more equity to put towards purchasing a bigger property.”
The increase in larger, more expensive homes as a share of new listings is one reason that overall asking prices continue to soar despite moderating demand. In June, homes with at least 1,750 square feet accounted for new listings (54.3%, up from 52.7% in 2021) than relatively smaller homes (45.7%, down from 47.3% in 2021).
While housing competition is still white-hot, motivating more new sellers to list, some buyers are still being priced out of the market by rising mortgage rates and record-high asking prices that have driven up typical mortgage rates and record-high asking prices that have driven up typical mortgage payments by 58% from a year ago.
Other factors aiding the inventory rebound is the decline in pending listings (-16.3% year-over-year), which means fewer for-sale homes under contract with a buyer. Additionally, new seller activity rebounded to 1% greater than its 2017-2019 pace, with new listings up 4.5% year-over-year.
Active listings increased in 40 of the 50 largest U.S. metros led by Austin, Texas (+144.5%), Phoenix (+113.2%), and Raleigh, N.C. (+111.7%). Meanwhile, June’s biggest new listings gains were posted in southern markets (+11.0%) in Raleigh (+37.6%), Nashville, Tenn. (+37.2%) and Charlotte, N.C. (+30.1%), as well as Las Vegas, Nevada (+34.8%).
Home Shoppers Are Still Snatching Up Homes Quickly
Although fewer people are demanding homes now, competition between buyers is still cutthroat. Time on the market trends compared to last year show that buyers continue to snatch up homes at near record-fast pace. The typical U.S. home spent 32 days on market in June, nearly a full month (-27 days) faster than usual June 2017-2019 timing.
However, month-to-month data tells the beginnings of a different story, with overall time on the market growing from May to June for the first time since June 2019. Time on market held close to May's record-low, but posted a slightly smaller yearly decline month-to-month (-4 days vs. -6 days).
While homes moved more quickly than June 2021, declines were greater among larger for-sale homes. Among June's active inventory, some listings with more square footage, such as those with 3,000-6,000 square feet sold faster year-over-year (-8.5 days) than relatively smaller homes like those with 750-1,750 square feet (-5 days).
These trends suggest one potential reason why the overall pace of time on the market remains competitive, despite softening demand, could be a shift in the mix of home shoppers, such as an increase in move-up buyers.
Typical Asking Prices Soar To Latest Record
Nationwide, typical asking prices again soared double-digits over 2021 levels in June, reaching their latest new high, which suggests that many sellers still have great expectations of the market. At the same time, a number of June trends indicate that sellers are beginning to compete for fewer buyers who have more options.
U.S. median listing price hit its latest record-high of $450,000, up 16.9% year-over-year. Active listing prices posted a slightly smaller gain last month (+17.6%), as did pending listing prices (to 13.9% from 16.2%).
The share of total homes with price reduction grew year-over-year nationwide by 7.6 percentage points in June. Price reductions grew most significantly, in Austin (+24.7), Phoenix (+22.2) and Las Vegas (+20.1). Roughly one in seven homes in June had a price reduction, up from roughly one in 13 last year, but still below one in every four to five that was typical in 2017-2019.
Condos Offer Relative Affordability In Most U.S. Counties
Affordability remains the number one obstacle of homeownership for many Americans. However, nationwide, the typical condo sold for an average of 6.7% less than the typical single-family home in 2021. Location explains this understated trend. The vast majority of condos (84.1%) were sold in just 6% of counties.
States with high levels of 2021 condo sales — New York, Massachusetts, Illinois and Washington — reveals that condo prices were an average 13.5% lower than single-family homes. In cities of New York, Boston, Chicago and Seattle condo buyers paid an average of 33.2% less.
In June, condos made up 20.2% of active inventory and were listed at 17.5% lower prices (on average across the 50 largest metros) than single-family homes.
"As big city buyers looked for ways to stay on budget in 2021, our analysis shows opting for a condo offered a solution in some counties. And there may still be opportunities going forward, even as condos' relatively lower price point is driving up their popularity and prices. If demand leads builders to ramp up condo construction, and the resulting increase in supply may help keep condo prices more manageable than those of single-family homes," Economic Research Analyst for Realtor.com Hannah Jones said.