America’s housing market has undergone some wild swings during the coronavirus pandemic, but at long last, it appears to be recovering.
In June, the number of real estate listings rose by 18.7% compared with a year earlier, according to a new report by Realtor.com®. That’s the second straight month of growth, and the fastest rise on record since July 2017, when this data was first collected. All told, this amounts to 98,000 more homes for sale every day compared with the same time last year.
Granted, this record-setting growth has a long way to go before boosting the nation’s housing inventory levels back to where they were before COVID-19. Three years ago, in June 2019, there were 53.2% more homes on the market—more than double what’s available today.
Nonetheless, the latest numbers suggest that America’s housing shortage woes might be seeing a glimmer of light at the end of the tunnel.
This gush of new sellers is likely motivated by the desire to cash in, as their profits continue to skyrocket. In June, median home prices hit another record high of $450,000—up 16.9% compared with last year and a whopping 31.4% compared with June 2020.
Meanwhile, weary buyers face not only sky-high home prices but also rising mortgage rates that now hover at 5.8%. And that financial double whammy is hitting homebuyers hard: Compared with just a year ago, the cost of financing 80% of a typical home rose 57.6%, amounting to an extra $745 per month.
Yet there is some relief in sight for home shoppers: The flood of new homes on the market likely means they’ll have more leverage when it comes to negotiating down the asking price. This, in turn, could help temper the raging seller’s market of the past two years and begin to balance the highly lopsided negotiating dynamics.