An ‘Incredible Trend’?

(RightIsRight.co) – An incredible trend is returning to normality, as homebuyers willing to face today’s high mortgage rates might be happy to know there is a growing number of homes to choose from.

In Realtor.com’s latest monthly housing report, the number of homes for sale in May has been increasing for seven months straight.

Realtor.com Senior Economist Ralph McLaughlin said, “The biggest eye-catcher for me is the fact that inventory is rising sharply. There are 35.2% more homes on the market than this time last year, an incredible trend in the direction of normality.”

As usual for the warmer months, the national median list price went up by 0.3% to $442,500 in May, compared to $430,000 in April. (Last year’s May median list price was $441,000.)

Moreover, the steady home prices are due to more affordable homes hitting the market.

“The inventory of lower-priced homes is rising faster than other segments,” McLaughlin stated. “There are 46.6% more homes on the market in the $200,000 to $350,000 range, something inventory and price-constrained buyers will surely welcome.”

In addition to the list price, buyers and sellers should check the median list price per square foot, which rose by 52.7% this May compared to May 2019.

Also, for sellers who bought before the COVID-19 pandemic, the typical listed home price this May grew by a whopping 37.5% compared to May 2019.

Even though more homes are being listed, high mortgage rates have kept some sellers hesitant.

This May saw 6.2% more new homes for sale than the same month last year. But that’s almost half of April’s new listings, which had a 12.2% growth rate.

Economic Data Manager Sabrina Speianu stated, “Sellers—who are often buyers themselves—responded to rising mortgage rates with some caution. The growth in newly listed homes dipped, although newly listed homes still remained higher than the previous year.”

If mortgage rates drop as expected, more sellers are likely to enter the market.

In May, housing stock increased in all four regions of the U.S. compared to the previous year.

For instance, the South led with the most listing growth year-over-year, reaching 47.2% in May while the West saw a 34.5% growth in homes for sale, the Midwest had a 20.5% increase, and the Northeast lagged behind with a 9.4% growth.

While listing levels this May are much improved compared to the previous three years, it is still down 34.2% compared with typical 2017 to 2019 levels.

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