According to Realtor.com August housing report, marking the slowest August in five years, homes spent 53 days on the market last month as the number of homes actively for sale increased by 35.8% compared with August 2023,

The number of homes for sale continues to be elevated at 10 straight months of annual growth, which is the highest level since May 2020.

While annual growth is persistent, this is the second consecutive month where the rate of growth has decreased from the prior month and although August inventory improved, it is still down 26.4% compared with typical 2017 to 2019 levels—a slight improvement from July’s 26.8% gap.

Compared with last year, the total number of unsold homes—including homes that are under contract—increased by 20.9% while the share of listings with price cuts reached the highest rate for August since 2018. The share increased by 3.1 percentage points compared with last year to 19.3%.

Home sellers also slowed their listing activity in August with -0.9% fewer new listings on the market compared to August 2023, which is the first negative reading in almost a year and a reversal from July’s 8.4% gain.

At $429,990, the median price of homes for sale in August decreased by 1.3% compared to one year prior. Yet, the median price per square foot grew by 2.3%. Realtor.com points out that the growth in the median price per square foot indicates that the share of smaller and more affordable homes continues to increase.

For U.S. metros, the report estimates the current relationship between rising inventory and days on the market to be about 6:1—every 6-percentage point annual increase in inventory is associated with a one-day increase in the median days on the market.

Regionally, the South and West are the closest to bridging the inventory gap, the report finds. In August, the South saw listings grow by 45.6%, while inventory grew by 34.5% in the West, 23.1% in the Midwest, and 13.9% in the Northeast.

Compared with the typical August from 2017 to 2019, the South saw the smallest gap in inventory, down 11.7% compared with pre-pandemic levels, while the gap was 15.9% in the West, and much larger in the Midwest and Northeast, at 44.7% and 54.6%, respectively.

In all 50 of the largest metros, inventory of homes for sale increased compared with August of last year. Yet, most metros still had a lower level compared to pre-pandemic years. Metros that saw the most inventory growth included Tampa (+90.1%), San Diego (+80.4%), and Orlando (+76.9%).

Newly listed home inventory increased the most in the South by 5.2% compared to last year. New inventory decreased by 4.7% in the Midwest, 1.5% in the Northeast, and 0.3% in the West. In August, 33 of the 50 largest metros saw new listings increase over the previous year, unchanged from 33 last month.

However, no large metros saw more newly listed homes in August compared with the typical pace of new listings from August 2017 to 2019. The metros that saw the largest growth in newly listed homes compared with 2023 included Cincinnati (+31.4%), Seattle (+30.0%), and San Diego (+22.8%).

Source: builderonline.com