The number of homes for sale nationwide in June rose 2%, the first annual increase since July 2019, according to a new report from Redfin.
Supply has built up as the combination of 5.5%-plus mortgage rates, high home prices and a faltering economy push more buyers to the sidelines, thereby creating a more balanced market. Home sales fell nearly 16% from a year ago, the largest decline since May 2020. The shift has also started impacting sale prices: They’re still growing by double digits, but the 11% year-over-year increase is the smallest in nearly two years.
“The country’s economic woes have already cooled the housing market, and they’re likely to continue dampening demand,” comments Daryl Fairweather, Redfin’s chief economist. “The Fed has signaled it may increase interest rates further to combat stubbornly high inflation, which could harm consumer confidence, and lower stock prices mean fewer prospective homebuyers can afford a down payment.”
“I advise sellers to commit: If you decide to sell, do it quickly before demand falls further,” adds Fairweather. :And price carefully – this is not the time to test the waters. You’ll do more harm than good if you overprice and have to do a price reduction or take the home off the market.”
The market is a mixed bag for buyers. They’re seeing higher monthly housing payments than earlier this year due to comparatively high mortgage rates but facing less competition for homes, which often allows them to make less risky offers that include protections like inspection and appraisal contingencies.
Denver and Indianapolis were the fastest markets, with half of all homes pending sale in just five days. The next-fastest markets, with six median days on market were Grand Rapids, Mich.; Omaha, Neb.; and Oklahoma City, Okla. The most competitive market in June was Rochester, N.Y., where 80.5% of homes sold above list price, followed by 76.8% in Worcester, Mass.; 76.2% in Oakland, Calif.; 75.4% in Buffalo, N.Y.; and 75% in Hartford, Conn.
North Port, Fla. had the nation’s highest price growth, with home prices rising 29.7% since a year earlier to $480,000. Cape Coral, Fla. had the second-highest growth at 27.7%, followed by Tampa, Fla. (26.1%); Fort Worth, Texas (24.2%); and Knoxville, Tenn. (24.1%). Only San Francisco (-0.5%) saw price declines in June.
No metro areas saw home sales increase from a year earlier in June. Greenville, S.C. had the smallest decline, with home sales dropping 2.3% year over year, followed by Worcester, Mass., down 4.1%. El Paso, Texas rounded out the top three with sales down 7.2% from a year ago.
West Palm Beach, Fla. saw the largest decline in sales from a year earlier, falling 34.1%. Next came Anaheim, Calif. and Miami, where home sales declined by 33.6% and 33.5%, respectively.
North Port, Fla. had the biggest increase in the number of homes for sale, up 34% year over year, followed by Colorado Springs, Colo. (31.5%) and Austin, Texas (26.9%).
Allentown, Pa. had the largest decrease in the number of homes for sale, falling 41.1% since last June. Next came Hartford, Conn. (-29.2%); Greensboro, N.C. (-28.6%); and Bridgeport, Conn. (-27.9%).
Read the full report here.