In a recent report, we outline some of the potential advantages of waiting until 2022 to buy a house. Additional inventory was one of the possible benefits.
Recent reports suggest that there could be more homes for sale later this year and into 2022. This would come as a welcome change for home buyers, given the tight inventory conditions we’ve seen over the past year.
Now, a new report from Realtor.com reinforces the idea that there could be more homes for sale in 2022. According to their data, new real estate listings increased significantly last month compared to the previous month. New listings were also up when measured year over year.
Report: More Homes for Sale Than a Year Ago
On July 1, Realtor.com published a housing market report with data for the nation as a whole along with major metro areas. One of the key points from that report had to do with the ongoing inventory shortage within the housing market. And it offered some good news for potential home buyers.
According to the July 2021 report, the number of new real estate listings nationwide rose by 10.9% from May to June of this year. Additionally, new listings were up by 5.5% year-over-year.
Some housing markets experienced an annual increase in new listings of 20% or more. The metro areas with the biggest year-over-year increases were:
- Milwaukee, Wisconsin (+44.7%)
- San Jose, California (+40.7%)
- Cleveland, Ohio (+37.9%)
If this trend continues, there could be more homes for sale in 2022 than there are right now. This would make house hunting a lot easier for buyers, while easing competition at the same time.
According to Realtor.com Senior economist George Ratiu:
“Inventory declines improved over the steep drops seen earlier in the pandemic as sellers stepped back into the market in a variety of price ranges across the country. The improvement we saw in new listings growth from May to June shows sellers are entering the market historically later in the season…”
A Positive Inventory Outlook for 2022?
A related survey offers even more hope for future home buyers. In April, the research team from Realtor.com published the results of a survey that showed more homeowners are planning to list their homes for sale.
Their survey revealed that 10% of homeowners across the U.S. are planning to sell their homes within the next 12 months. That’s an important data point, because it’s 25% higher than the usual share of homes that come onto the market in a typical year. In other words, an unusually high number of homeowners say they are planning to sell.
Of those who said they are planning to list their homes, the majority said they plan to do so within the next six months.
To quote the April 2021 realtor.com report:
“In light of these numbers, the survey highlights that the next six months are likely to see a noticeable boost to the inventory of existing homes for sale. Over 60 percent of potential sellers indicated that they planned to list within the next six months.”
Related: Why starter homes are hard to find
Prices Are Still Rising and Homes Are Selling Faster
So we have two indicators that there could be more homes for sale in 2022. We have a sizeable increase in the number of new real estate listings, as measured through the Realtor.com property listings website. Additionally, a recent survey showed that a fairly high number of homeowners are planning to sell their homes within the next six months or so.
But it will take some time for these trends to shift the housing market in a considerable way. At present, the real estate market still favors sellers over buyers due to low inventory and strong demand.
According to Realtor.com’s July housing market update, the median list price for existing single-family homes rose 12.7% in June compared to a year earlier. Additionally, this report showed that homes are selling faster today than they were a year ago (on average).
The “fastest” real estate markets in the country are Denver, Nashville and Rochester. In all three of these metro areas, homes listed for sale spent a median of just 12 to 15 days on the market. That’s a relatively low number when compared to the national average, and it indicates a highly competitive housing market.
Most real estate markets across the country have “accelerated” over the past year, to varying degrees. Faster home sales and rising prices are the current state of affairs.
The Dilemma: Buying Now Versus Next Year
The bottom line is that we will most likely see more homes for sale in 2022 compared to the level we’re at now. But the housing market is still highly competitive with quick sales and steadily rising prices. This is true for most cities across the U.S., with few exceptions.
Home buyers who push their purchases off until 2022 might have more properties to choose from. But they could encounter higher housing costs as well. Buyers should consider all of these overlapping factors, in order to make an informed purchasing decision.