After years of historically low for-sale listings, the number of houses on the market in July surpassed pre-pandemic levels, a sign that a housing market reset could be on the way.
Exclusive data from Homes.com revealed that inventory increased 26%, or by nearly 300,000 homes, in July compared to the same time a year earlier. In all, there were more than 1.4 million houses for sale, marking the largest monthly supply since at least 2017.
It’s the seventh consecutive month of inventory growth, according to the data.
The uptick in listings was driven by a 31% rise in for-sale condos, a 26% boost in townhouses and a 25% increase in detached single-family homes.
All told, the data is the latest evidence that a shift is afoot in the housing market. On the one hand, "market dynamics are moving toward a buyer’s market, with homes staying on the market longer and potential homebuyers having more choices and stronger negotiating power," Erika Ludvigsen, national director of residential analytics at Homes.com, said in an interview.
At the same time, "buyer demand has cooled due to high interest rates and elevated prices," she added. In other words, there's a mismatch between the supply of houses and the demand from buyers to buy those homes.
Inventory growth in the Sun Belt and Midwest stays strong
July’s data also marked the continuation of a geographic trend: Many of the highest inventory growth markets were concentrated in the Sun Belt and parts of the West.
Of the top 10 markets with the most growth, four were in the Sun Belt — Raleigh, North Carolina; Miami; Atlanta; and Houston. Two were in the West — Las Vegas and San Diego.
"Increased migration and rapid homebuilding during and post-pandemic in those metros have added significant new housing stock to the market," according to Ludvigsen.
Meanwhile, Midwestern markets, including Minneapolis and Chicago, and Northeastern markets, such as Providence, Rhode Island, and Philadelphia, were toward the bottom of the list for growth.
Even so, of the top 40 markets tracked by Homes.com, the minimum increase was nearly 7%. And of all 941 markets tracked, 94% saw their inventory increase.
