A lack of homes for sale in the US is dragging on the housing market, according to a new report from Realtor.com.
Although the number of homes for sale rose, new listings remained scarce in March, according to the company’s March report. The increase in the number of homes for sale is “a reflection of more time spent on the market,” the company said, rather than new sellers joining the fray.
Aside from high mortgage rates, which push up the cost of home ownership for would-be buyers, the lack of homes will likely affect home sales as buyers are left with few options.
The supply of active listings for sale rose nearly 60% in March compared with the same month last year, but it’s still nearly 50% below prepandemic levels. Recently listed homes fell by 20% compared to March 2022. Last month, that number fell by 15.9%.
Listings are growing the most in the South, by 127%. And within the 50 biggest US metro areas, Austin, Texas, saw the most growth, with active inventory growing by 312%, followed by Raleigh, NC, where inventory grew by 274%.
Only three markets in the top 50 had inventory declines on a year-over-year basis, including Milwaukee, Wis.; Hartford, Conn.; and New York City.
Realtor.com also found that more buyers are back in the market, but not at the same level as a year before.
“Signs show that buyers are active in the spring housing market, even if they aren’t as numerous as they were during the pandemic,” Danielle Hale, chief economist for Realtor.com, said in a statement.
“Amid a few new choices on the market and still rising home prices, home shoppers have shown that they are very rate sensitive, only jumping back in the market when rates dip, and so what happens with rates this spring will likely play a strong role in determining whether the housing market bumps along or picks up speed this year,” she added.
In March, a typical home spent 54 days on the market, 18 days longer than the same time last year. But in the prepandemic period between 2017 and 2019, homes spent even longer on the market on average.
Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.