July Sees Acceleration In Housing Inventory Shortage

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July Sees Acceleration In Housing Inventory Shortage

Aug 11, 2023 | News | 0 comments

In July 2023, U.S. housing supply rose while active listings fell below year-ago levels (-6.4%). Median list price also dropped year-over-year (-0.9% to $440,000) for a second month, slightly favoring buyers, per Realtor.com’s report.

In July, U.S. active listing growth slowed for the fourth consecutive month, dropping by -6.4% YoY, the first decline since April 2022. This scarcity left today’s buyers with 45,000 fewer options on an average July day, according to Realtor.com. New listings (-20.8%) and pending listings (-12.6%) also fell YoY, though the latter’s decline improved from June’s steep drop. Among the top 50 metros, 38 experienced lower active inventory, except the Southern region led by New Orleans, San Antonio, and Memphis. Notably, Phoenix, Seattle, and San Jose saw the largest drops in new listings. Despite a slight YoY decline for two months, the strong job market and low supply are projected to maintain price pressure, keeping the market active.

In July, the U.S. median list price dropped for the second consecutive month (-0.9% YoY) to $440,000 from June’s $445,000, down -2.0% from June 2022’s peak. Higher mortgage rates increased financing costs by about $346 (+17.5%) for 80% of typical homes compared to last year. Nationally, homes with price reductions decreased from 19.1% (July 2022) to 15.5% this year, remaining below 2017-2019 levels.

In June, homes spent 45 days on the market, 11 days more YoY, yet 12 days less than the 2017-2019 average. Across the top 50 U.S. metros, the average home took 39 days to sell in July 2023, up eight days from July 2022. Longer times were notable in Miami, Austin, San Antonio, and Raleigh.

Amid rising rates and persistent high prices, more buyers seek homes beyond their areas, particularly in the West and Northeast, as highlighted by Realtor.com’s Q2 Cross-Market Demand Report.

Realtor.com Economist Jiayi Xu suggests that due to ongoing housing affordability challenges, Americans are increasingly seeking homes in more budget-friendly regions. This shift has led to heightened interest from out-of-town buyers, a change from previous years. According to Xu, the sources of this interest might hold surprising insights.