Sellers are beginning to compete for buyers as inventory and new listings continue to improve in August, according to Realtors Monthly Housing Report.
Housing inventory fell 25.8% year-over-year in August, whereas last month inventory fell 33.5%. Also, new listings are up 4.3% from last year as more new sellers list entry-level homes at more affordable prices.
The rate of sellers making price adjustments has finally returned to pre-pandemic levels. The share of sellers who made listing price adjustments grew 0.7% year-over-year to 17.3% of active inventory. That is the highest share in 21 months and closer to typical 2016-2019 levels.
“Low mortgage rates have motivated homebuyers to endure this year's challenging market and now some buyers are starting to see their persistence pay off,” said Realtor.com chief economist, Danielle Hale. “This month, new sellers added more affordable entry-level homes to the market compared to last year, while others began adjusting listing prices to better compete with an uptick in inventory.”
Although August marked the fourth consecutive month of national inventory improvements, the U.S. housing supply is still short 223,000 active listings compared with last year. Still, inventory was improving across the 50 largest U.S. markets in August, down an average 20.7% year-over-year. In Washington, D.C. (+17.1%) inventory surpassed 2020 levels.
“It's still a strong seller's market, with homes selling quickly at record-high prices,” Hale added. “But now a home priced well and in good condition may see two or three bids compared to 10 last year. For sellers not seeing as many offers, it may be worth revisiting pricing strategies as buyers continue searching for homes that fit their budgets.”
An additional 432,000 new listings hit the market in August, increasing inventory 18,000 over last year. New sellers increased the share of entry-level homes by 6.4% (also defined as single-family homes in the 750-1,750 square foot range). On the other hand, new listings that offer a much larger space (3,000-6,000 square feet) declined their share by 4.6% in August.
The U.S. median listing price grew 8.6% year-over-year in August. This means prices grew, on average, $380,000 in August, just 1.3% below last month's record price of $385,000. Entry-level home prices grew 17.6% year-over-year, which is much faster than 3,000-6,000 single-family home prices (+15.3%).
The typical U.S. home spent 39 days on the market in August, which is 24 days faster than the same month in a typical year like 2017-2019. Still, the time on the market continues to slow from the record-pace seen earlier in the pandemic. Nashville had the fastest time on the market for August with a median of 18 days.
Click the link to read CA Realtor’s full Monthly Housing Report.
