For the first time since 2019, there were more houses for sale last month than there were a year earlier.
That’s according to new data from real estate brokerage Redfin, which found that the number of homes for sale rose 2% on an annual basis in June. The change is another sign the notoriously hot housing market is finally starting to cool down, but it’s not necessarily good news for all buyers.
“The country’s economic woes have already cooled the housing market, and they’re likely to continue dampening demand,” Redfin Chief Economist Daryl Fairweather said in a news release.
That means a bigger supply of houses, though it's worth remembering that inventory is still significantly lower than it was before the pandemic. Despite the recent uptick in supply, data from Realtor.com shows that there were less than half the number of homes available last month than there were in June 2019.
Even so, sales are slowing and mortgage applications are falling, and inventory is growing as a result. If, as expected, the Federal Reserve keeps raising interest rates to combat inflation, consumer confidence may take a hit — "and lower stock prices mean fewer prospective homebuyers can afford a down payment," Fairweather added. That, too, could have a ripple effect on supply.
10 cities where it’s getting easier to find a house
But for those buyers who can still afford to wade in, rising supply means that many of the woes that have characterized the housing market over the past two years — think: ultra-competitive bidding wars, packed open houses and even the need for therapy — are beginning to fade away.
Here are the top 10 cities where housing supply has risen the most over the past year, according to Redfin data. The percentages show the increase in the number of homes for sale in each city between June 2021 and June 2022. (Note that Redfin limited its analysis to metropolitan areas with populations of 750,000 or more.)
- North Port, Florida: 34%
- Colorado Springs, Colorado: 31.5%
- Austin, Texas: 26.9%
- Nashville, Tennessee: 25.3%
- Stockton, California: 21.9%
- Phoenix, Arizona: 21%
- Tacoma, Washington: 19.9%
- Las Vegas, Nevada: 17.7%
- Chicago, Illinois: 17.6%
- Fort Worth, Texas: 17%
If you’re considering buying a new home as the market cools, it’s worth remembering two important facts.
First, inventory isn’t rising in every city in the country: There were 41% fewer homes for sale in Allentown, Pennsylvania, last month compared to June 2021, for instance, because so much of the dynamics of the housing market depends on local factors.
Second, prices are still rising in many cities — albeit at a slower pace than they did in 2021 — and experts expect them to keep rising through the end of the year. In many ways, “it’s still a seller’s market out there, at least for the moment,” Robert Heck, VP of mortgage at online mortgage marketplace Morty, previously told Money.
In conclusion: It's important to understand how the national housing market is changing, but don't forget that a home purchase is a personal undertaking. "The decision on whether to buy should always be looked at within the context of your longer-term goals and individual financial situation," Heck said.