Number of Homes for Sale Increases by 19.8%: How to Navigate the Recent Surge in Inventory
The housing market is experiencing a notable shift as inventory levels increased by 19.8% year-over-year. With new home construction reaching highs not seen since 2008 and existing-home sales making a modest rebound, the market landscape seems to be evolving.
Whether you’re buying or selling, understanding these recent trends is key to making informed decisions.
Positive Signals for Starter Homes and First-Time Homebuyers, An Increase in Inventory and Sales
One of the most encouraging signs is the uptick in starter home sales.
Pending sales of starter homes rose by 10.2% year-over-year in July, reaching the highest level since October 2022.
Redfin Senior Economist Sheharyar Bokhari points out that the rise in starter home sales is driven by a combination of young families, investors, and buyers who have been compelled to consider more affordable housing options.
“More buyers means more sales, but so far we aren’t seeing prices skyrocket,” Bokhari says. “The rising number of homes hitting the market is enough to satisfy the increased demand— a positive outcome for both buyers and sellers.”
New Home Construction: A Bright Spot
New home construction has been a major contributor to the increase in inventory, reaching its highest levels since early 2008. In July, new home sales surged by 10.6%, marking the highest level of new home sales since May 2023 as well as the sharpest increase in new home sales since August 2022.
However, it’s important to note that new home sales are tracked when a sales contract is signed or a deposit is accepted, and the home can be in any stage of construction— whether not yet started, under construction, or completed.
Signs of Recovery for the Existing-Home Market
The existing-home market is also seeing some positive movement. Sales of existing homes grew by 1.3% month over month in July, reaching a seasonally adjusted annual rate of 3.95 million. This increase breaks a four-month streak of declining sales.
Zillow Reports Increase in Price Cuts, Shifts in Affordability
Affordability continues to be a significant obstacle for many buyers; however, there are signs that the market is beginning to shift.
Zillow reports that approximately 25% of its listings saw price cuts in June, the highest rate for this time of year since 2018. The increase in price reductions may offer some relief to buyers facing consistently high home prices.
Closing Thoughts
The latest data from the National Association of Realtors (NAR) provides additional insights into this summer’s housing market:
> First-time buyers accounted for 29% of sales
> Individual investors purchased 13% of homes
> All-cash sales made up 27% of transactions
> On average, properties remained on the market for approximately 24 days.
As we gear up for fall, buyers and sellers should remain informed of shifting market trends. Give us a call or visit us online for a free mortgage consultation so you can start developing the best strategy for your family today.