The supply of homes across the country is up for the first time in nearly three years.
Nationally, the number of homes for sale in June increased 2%, the first increase since July of 2019, according to a new Redfin report.
Supply issues have plagued the real estate market throughout the pandemic, making it difficult to impossible for buyers to find the home of their dreams as supply struggled to keep up with increased demand.
The buildup in supply is due to a combination of increased mortgage rates, high housing prices and the economy – all factors pushing more buyers out, which in turn is bringing more balance to the market.
That shift impacted both the number of sales and prices. June home sales fell almost 16% from last year, the largest decline since May of 2020, according to the report. Prices are also impacted. Despite the double-digit growth in home prices, the 11% increase from last year is the smallest in nearly two years, according to the report.
Redfin chief economist Daryl Fairweather said the country’s economic woes have cooled the housing market and are likely to continue dampening demand.
“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,” Fairweather said. “I advise sellers to commit: If you decide to sell, do it quickly before demand falls further. 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.”
Markets in Denver and Indianapolis grew the fastest last month with half of all homes on the market pending in just five days. The next fastest were Grand Rapids, Michigan; Omaha, Nebraska; and Oklahoma City, which were on the market a median of six days.
Rochester, New York, had the most competitive markets in June, as 80.5% of homes sold above list price. That was followed by Worcester, Massachusetts, at 76.8%; Oakland, California, at 76.2%; Buffalo, New York, at 75.4%; and Hartford, Connecticut, at 75%.
The highest home price growth was in North Port, Florida, where home prices rose 29.7% from last year to $480,000. That was followed by Cape Coral, Florida, at 27.7%; Tampa, Florida, at 26.1%; Fort Worth, Texas, 24.2%; and Knoxville, Tennessee, at 24.1%. The only metro that saw declines in June was San Francisco, where home prices fell 0.5%.