New supply can help price growth move back to a more normal rate of increase, says realtor.com
There US housing market reached another recovery milestone last week, according to realtor.com.
For the first time since the outbreak of the coronavirus in the US, new listings growth leapfrogged past its January level.
Now, all four major components of realtor.com's Housing Market Recovery Index – new listings, house demand, asking prices, and pace of sales – have exceeded the report's pre-COVID baseline of January 2020 levels.
The overall index climbed 1.9 points week over week to a reading of 105.6 for the week ending Aug. 8. New supply growth has surpassed its pre-COVID levels by 1.7 points, reaching 101.7 nationwide.
However, new listings were still 6% below where they were during this time last year. Total inventory also saw a 36% cut as buyers continue to scoop up the new listings that came up for sale – resulting in the second single-digit yearly decline since early March.
The combination of eager buyers, record-low mortgage rates, and scarce inventory set the stage for further price increases, according to realtor.com. Last week, median listing prices were rising at a 9.9% year-over-year pace. Time on the market was still four days faster than in 2019.
"Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone," said Javier Vivas, director of economic research for realtor.com. "After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay."
