For the last couple of years, the U.S. housing market has made things tough for home buyers due to a dearth of inventory. There just weren’t enough homes for sale to satisfy demand, and this led to bidding wars, above-market offers, and other hallmarks of a sellers’ market.
But recent trends suggest that the inventory crunch might be easing in many housing markets across America. This means home buyers could have more properties to choose from, and a bit less competition. In other words, the housing market might be more “buyer friendly” in the coming months.
Inventory Up Nearly 4% from April to May
According to a recent report from Realtor.com, the total number of homes listed for sale in the U.S. rose by ⇑3.8% from April to May 2015. Granted, inventory declined by ⇓15.7% over the last year or so. But the more recent data suggest that more homes are coming onto the market to satisfy demand. This is good news for home buyers, because it means they could have an easier time finding a suitable property.
If inventory continues to rise in this manner, we could see an end to bidding wars in some housing markets where they’ve been common. This would be another welcomed trend for home buyers.
The numbers above pertain to the national housing market, as a whole. At the city and metro level, inventory trends vary widely. But the general trend is that inventory contraction is slowing and/or reversing in most markets. This is true even in markets that have experienced severe levels of inventory reduction over the last couple of years.
For instance, the number of homes for sale in Los Angeles, California dropped by a whopping -40% over the last year or so. But from April to May 2015, inventory rose by +3.2%, according to Realtor.com. Other major housing markets in California, including San Francisco and San Diego, have mirrored this trend.
In Washington, D.C., home listings dropped by more than -31% over the last year. But from April to May, listings rose by 11.7%. Similar trends are happening across the U.S.
A More ‘Buyer-Friendly’ Housing Market?
Granted, not all markets appear to be reversing in this manner. Residential real estate inventories are still dropping in some cities, such as Denver and Miami. But overall, trends are showing inventory growth for a change. This is making the housing market more buyer-friendly, as we head deeper into the summer home-buying “season.”
Despite all of this, home buyers still need to bring their ‘A’ game when entering the market. There’s a lot of competition for homes these days. Mortgage rates rose a bit last week, but they’re still historically low. This serves as a lure for home buyers, bringing more of them into the market. Additionally, job growth nationwide is putting more people in a position to buy a home. So we could see increased demand for housing (particularly among buyers) over the coming months.
Disclaimer: This story contains third-party data that is deemed reliable but not guaranteed. We make no claims or assertions about the current or future state of the housing market. Real estate trends and conditions vary from one city to the next. Consult a local real estate specialist if you have questions about your housing market.