Today's Buying Landscape Looks Barren, With 40% Fewer Homes for Sale
The total number of U.S. homes for sale dropped 6% year-over-year during the four weeks ending June 11—the biggest decline in 13 months—and, according to Redfin, there are 39% fewer homes for sale now than there were five years ago in June 2018. That inventory crunch is largely attributed to a home building slump that has persisted for more than a decade. In addition, fast-rising mortgage rates have caused a growing share of prospective sellers to stay put and hold onto a comparatively low rate.
As sellers pull back, demand is outpacing supply nationwide, a phenomenon that will likely keep prices high for the remainder of the year, even as shelter inflation falls and the Federal Reserve slows its rate hikes.
Mortgage-purchase applications rose 8% over the last week, and Redfin’s Homebuyer Demand Index–a measure of requests for tours and other services from Redfin agents–is up over the last two weeks and near its highest level in a year. That means there’s a fair amount of pent-up demand, and many buyers will be ready to pounce when more homes hit the market. Demand outpacing supply is preventing home prices from falling drastically: The median sale price is down just 1.1%, the smallest annual decline in three months.