There’s much-needed relief on the way for beleaguered home shoppers who are having difficulty finding the home of their dreams, as the number of homes hitting the market is on the uptick.
According to a new report from Realtor.com, new home listings increased in August, the fifth month in a row that the number of homes hitting the market has increased.
Per the report, the number of new listings increased 4.3% in August 2021 compared to the same month last year. Overall, there were 432,000 homes listed for sale in August, an increase of 18,000 over last year.
While the number of homes hitting the market is increasing, inventory has still not caught back up to where it was last year. According to the report, total housing inventory in August 2021 was 25.8% lower than it was in August 2020.
But as more people are putting their homes up for sale, inventory should creep back towards healthier levels.
According to Realtor.com Chief Economist Danielle Hale, a good part of the inventory increase is being seen in entry-level homes, giving first-time homebuyers more options.
"Low mortgage rates have motivated homebuyers to endure this year's challenging market and now some buyers are starting to see their persistence pay off,” Hale said. “This month, new sellers added more affordable entry-level homes to the market compared to last year, while others began adjusting listing prices to better compete with an uptick in inventory.”
As Hale noted, more sellers are making listing price adjustments, indicating that supply and demand may be moving closer together.
According to the report, the share of sellers who made listing price adjustments to 17.3% of active inventory, which is the highest share in 21 months and closer to typical 2016-2019 levels.
"It's still a strong seller's market, with homes selling quickly at record-high prices. But now a home priced well and in good condition may see two or three bids compared to 10 last year,” Hale said. “For sellers not seeing as many offers, it may be worth revisiting pricing strategies as buyers continue searching for homes that fit their budgets."
Beyond that, there are some markets where inventory is increasing even faster.
According to the report, six of the nation’s largest metro areas saw inventory surpass 2020 levels in August, including Washington, D.C., where inventory rose by 17.1% year-over year.
Across the 50 largest markets, new listings increased an average of 5.1% year-over-year in August, Realtor.com said in its report.
Broken down by region, the biggest increase in new listings was seen in the the Midwest (+12.5%), with Columbus, Ohio (+25.6%) and Cleveland, Ohio (+21.6%) each among the top five markets that saw the most listing growth year-over-year.
According to the report, the South also saw a “sizable” yearly increase in new sellers in August (+6.1%). Louisville, Kentucky (+22.8%), Baltimore (+20.2%) and New Orleans (+19.9%) were also among the top five metros with the biggest gains in new listings.