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A significant shift is occurring in the U.S. housing market: the number of homes for sale is climbing at its fastest pace in nearly five years, yet buyer demand is falling to a decade low. The core reason is a record-high cost of homeownership, combined with economic uncertainty, which is sidelining potential buyers even as more sellers decide to list their properties. This dynamic is creating a unique market environment where inventory is beginning to pile up, altering the balance between buyers and sellers.
The primary factor deterring buyers is affordability. The median monthly housing payment has reached an all-time high of $2,882. This staggering cost is driven by a combination of persistent year-over-year price increases (1.7% as of late May) and mortgage rates hovering near 7%. For many Americans, this simply prices them out of the market. Furthermore, broader economic concerns, including fears of a potential recession or trade wars, have led to a near-record low in consumer sentiment. When making a purchase as significant as a home, this unease causes many to adopt a "wait-and-see" approach, despite their ability to buy.
On the supply side, the same economic forces are motivating a surge in new listings, which are up 8.4% year-over-year. Sellers are acting for several key reasons:
Based on our experience assessment, this influx of sellers who are motivated by market timing, rather than necessity, is a key contributor to the growing inventory.
The national trend of rising inventory does not tell the whole story, as conditions vary dramatically across the country. The table below highlights key metrics for select metropolitan areas for the four weeks ending May 18, illustrating these regional differences.
| Metro Area | Year-over-Year Change in New Listings | Year-over-Year Change in Pending Sales | Year-over-Year Change in Total Inventory |
|---|---|---|---|
| Miami, FL | +10.2% | Data Not Provided | Data Not Provided |
| Detroit, MI | +9.5% | -11.1% | Data Not Provided |
| Austin, TX | -3.1% | Data Not Provided | Data Not Provided |
| Fort Lauderdale, FL | Data Not Provided | -17.1% | -7.5% |
| Houston, TX | -1.2% | Data Not Provided | +17% |
| Seattle, WA | Data Not Provided | Data Not Provided | +14.5% |
As the data shows, markets like Miami and Detroit are experiencing a boom in new listings, while sales are plummeting in areas like Fort Lauderdale. Conversely, inventory is building rapidly in cities like Houston and Seattle.
This cooldown in buyer activity amid rising supply creates a new set of negotiations. Sellers who were accustomed to multiple offers may need to adjust their expectations. A real estate agent in Maryland noted, "Clients are asking me to call them when we’re at a tipping point... My advice to homeowners: If you’re planning to sell in the next year or two, do it now because we don’t know what’s going to happen with home values or the larger economy."
For buyers, the increasing inventory provides more options and potentially more negotiating power. Buyers may be able to secure a home for under its asking price or negotiate for seller concessions, such as help with closing costs, which were rare in the highly competitive market of recent years.
In the current market, sellers should price their homes competitively from the start and be prepared to negotiate, as buyers are more sensitive than ever to price. Buyers, while facing high costs, may find opportunities to purchase a home with less competition and more favorable terms than seen in the past several years. The predictability of any advice, however, is dependent on broader economic trends, making it essential to consult with a local real estate professional who can assess hyper-local market conditions.
