Topline
There were 1.4 million homes for sale in the U.S. in May, the fewest in any month since at least 2012, fueling bidding wars between hopeful homebuyers, according to online real estate giant Redfin.
This 2017 file photo shows a home for sale in Fort Washington, Pennsylvania. Redfin reported … [+]
Key Facts
The number of homes for sale in the U.S. fell 7.1% year-over-year in May, real estate brokerage Redfin reported on Wednesday.
With 1.4 million homes on the market, May represents the lowest number since Redfin began keeping records in 2012.
Redfin attributes this shrinking housing inventory to homeowners feeling trapped by rising mortgage rates, adding that new listings are down 25% to the third lowest level on record.
Additionally, 37% of homes sold in May went for above listing prices, according to Redfin, sparking concerns that this tightened market is fueling bidding wars.
In a statement, Redfin chief economist Daryl Fairweather said the bidding wars may only become more common as interest rates eventually fall, encouraging many buyers waiting on the sidelines to jump back into the market.
Areas where competition remains hot include Rochester, New York, where 72.7% of homes sold above their list price, down just 3.1 percentage points year over year, followed by Milwaukee, Wisconsin and Hartford, Connecticut.
Big Number
2.2 million. That’s how many homes were for sale in May 2019—800,000 more than last month. However, that was before the pandemic sparked a home-buying frenzy.
Contra
Despite homes for sale dropping to such low levels, the amount of new home construction saw a three-decade high in May. U.S. home-building surged 21.7% from April to May, with 1.631 million single-family units, according to data released by the U.S. Census Bureau Tuesday. The number of building permits granted for new housing units also rose 5.2% in May. However, the two contrasting data points are likely connected, according to industry experts. The National Association of Home Builders reported in a survey released Monday that the lack of inventory in the existing home market is what is motivating builders to increase their output.
Further Reading
There Were Fewer Homes for Sale in May Than Any Other Month on Record (Redfin)
U.S. Housing Starts Rise Rapidly, Oil Prices Decline: A Surprise On Both Counts (Forbes)
Source: https://www.forbes.com/sites/willskipworth/2023/06/21/housing-shortage-fuels-price-bidding-wars-as-homes-for-sale-hit-record-low/