If there's one drumbeat everyone has heard in news about the U.S. housing market, it's the one about the reality and effects of tight inventory.
But that refrain could actually be about to change. New data from Realtor.com shows continuing deceleration in the rate of inventory decline in July.
However, it's important to keep a more holistic picture in mind. While inventory constraints might be easing, the data also show that two of the most obvious effects of low supply—high prices and short times on the market—are not going anywhere.
“This July, the rate of decline in the nation’s inventory of active home listings has slowed considerably,” the report stated.
Realtor.com is predicting inventory will decrease by 4 percent year over year, even though sales are expected to keep moving at a swift pace. But listing inventory in July was actually up from June, by 3 percent nationally.
“This rate of decrease is slower than the 8 percent average decrease in the previous 12 months,” the report stated. “If this trend persists, it’s likely that the coming months will see the first inventory gain in more than three years.
Approximately 527,000 new listings hit the market in July, Realtor.com reported.
The agency also expects listing prices to increase by 9 percent year over year. The median listing price for July was $299,000, which was flat compared to June but 9 percent above where it was last July.
“Listing prices ... do not yet show signs of slowing down,” Realtor.com wrote.
According to the July data, the median age of inventory was 58 days by month's end. That's both up 7 percent from June and down 8 percent from last year. Meanwhile, the median age of properties listed on Realtor.com in July is expected to reach 59 days. That would be five days less than last July but five days more than June.
“Homes are expected to continue to sell rapidly, despite continued increases in listing prices and slowdown in inventory decline,” the report stated.