For-Sale Home Inventory Improves in August
Sellers are beginning to bring more affordable housing options to the market, according to a new report from Realtor.com. In August, the 432,000 new home listings came to market, an increase of 4.3% year-over-year. In addition, more home sellers are making pricing adjustments. Such adjustments are up .7% to a total of 17.3% of active inventory, which is in line with pricing adjustments from the 2016 to 2019 era.
While the report came with good news, it also shed light on the depth of the housing supply shortage. US for-sale home inventory is still down 25.8% year-over-year, although an improvement from the 33% decline in July, and the housing supply is short more than 223,000 listings. Although these numbers seem dire, the report notes that August was the fourth consecutive month of housing supply improvements, down from the peak in April.
The houses that are coming to market are also in a lower price range, helping to supply a high-demand segment of the market. The share of entry-level homes increased 6.4% in August. Virginia Beach, Milwaukee and Tampa had the highest monthly gains for entry-level home supply, according to the report.
Pricing stability will also help home affordability. Home prices increased 8.6% in August to a national average of $380,000. While home prices are still rapidly escalating, there is a trend toward moderation. Home prices increased 10.3% in July, for example. Still, more than 30% of the largest metros had double-digit pricing gains in August. In the Western US, home prices increased 9.3%, and in the Southern region, prices were up 7.4%.
However, many markets with rapid appreciation also had high occurrences of seller pricing adjustments. Austin is a prime example. Prices were up 33% in Austin in August, but 23.8% of sellers made a pricing reduction adjustment in the same month. Las Vegas, Tampa, Riverside and Orlando were also markets to post significant price increases and seller price adjustments in the month.
Despite the high cost of a home, they aren’t sitting on the market for long. In 2020, homes listings in August sat on the market for an average of 56 days, and in 2019, listings sat on the market for but this year, most homes stayed on the market for 63 days. This year, homes sat on the market for an average of 39 days before being sold.
The high home prices are still competitive with apartment rents in some markets. Another survey from Realtor.com found that entry level homes in markets like Birmingham, Ala., St. Louis, Pittsburgh, Orlando and Cleveland were all less expensive that the cost of average rents.