Key Housing Indicators Begin to Turn Around in May

Key Housing Indicators Begin to Turn Around in May

  • National inventory declined by 19.9 percent year-over-year, and inventory in large markets decreased by 21.9 percent.
  • The inventory of newly listed properties declined by 29.4 percent over the past year, and 28.6 percent in large markets
  • The May national median listing price was $330,000, up 1.6 percent year-over-year.
  • Nationally, homes sold in 71 days in May, 15 days more slowly than last year

Realtor.com®’s May housing data release reveals that the U.S. housing market likely reached its low point during mid-April, with constrained new listings and minimal price growth. Signs of recovery emerged, as yearly declines in newly listed inventory slowed and listing prices recovered. However, despite many positive trends, COVID-related challenges linger, as homes were on the market more than two weeks longer than this time last year. 

For-Sale Homes Still in Short Supply, but New Listings Trend Improves

The total number of homes available for sale continued to be constrained in May. Nationally, inventory decreased 19.9 percent year-over-year, a faster rate of decline compared to the 15.3 percent year-over-year drop in April. This amounted to a loss of 255,000 listings compared to May of last year. The volume of newly listed properties in May decreased by 29.4 percent since last year. While still well below last year’s levels, the rate of decline in newly listed properties has improved from a decline of 44.1 percent year-over-year in April, signaling that sellers are starting to return to the marketplace, which is needed to restore inventory levels to healthy market conditions 

Housing inventory in the 50 largest U.S. metros declined by 21.9 percent year-over-year in May. This is an acceleration compared to the 16.0 percent year-over-year decline in April. The metros which saw the biggest declines in inventory were typically those hardest hit by COVID-19, such as Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (-38.6 percent); Providence-Warwick, RI-MA (-35.8%); and Baltimore-Columbia-Towson, MD (-34.5%). This month, none of the largest 50 metros saw an inventory increase on a year-over-year basis and 43 out of 50 saw greater inventory declines than last month. However, 45 out of the 50 markets saw the yearly decline in newly listed properties improve somewhat since last month.

COVID-19 Extends Days on Market

Homes continue to sell more slowly than last year due to stay at home orders and modified behavior resulting from COVID-19. Nationally, the typical home sold in 71 days in May, 15 days more slowly than May of last year. In the 50 largest U.S. metros, the typical home spent 58 days on the market, and homes sold 13 days more slowly, on average, compared to last May. Last month, the increase in time spent on market was more apparent in the 50 largest metros. This month, it appears that the nation’s largest metros have improved relative to the national rate. Among the larger metropolitan areas, homes saw the greatest increase in time spent on the market in Buffalo-Cheektowaga-Niagara Falls, NY (+34 days); Pittsburgh, PA (+33 days); and Detroit-Warren-Dearborn-MI (+32 days); among other areas that have been particularly hard-hit by COVID-19.

Listing Prices Hit New Highs Despite COVID-19

The median national home listing price grew by 1.6 percent year-over-year, to a new high of $330,000 in May. This is a re-acceleration from the 0.6 percent year-over-year growth seen in April. Movements in the median listing price continue to be partly driven by a change in the mix of inventory. This month, the share of more expensive properties on the market recovered and increased compared to last month. Moreover, our weekly data shows the year-over-year change in the median listing price growing by as much as 3.1 percent year-over-year in the week ending May 30th. The nation’s median listing price per square foot grew by 5.4 percent year-over-year, an acceleration from the 4.0 percent growth seen last month.  

Within the nation’s largest metros, median listing price growth also accelerated compared to last month. Listing prices in the largest metros grew by an average of 3.3 percent last year, an acceleration from the 1.6 percent year-over-year gain seen last month. Of the largest 50 metros, now 35 saw year-over-year gains in median listing prices, up from 30 last month. Los Angeles-Long Beach-Anaheim, CA (+14.9%), Pittsburgh, PA (+14.0 percent); and Cincinnati, OH-KY-IN (+12.1%); posted the highest year-over-year median list price growth in May. The steepest price declines were seen in Detroit-Warren-Dearborn, MI (-3.4 percent); San Antonio-New Braunfels, TX (-3.2 percent); and Seattle-Tacoma-Bellevue, WA (-3.1 percent). 

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Tammy Fadler