The number of unsold homes in the U.S. hits a record high — is that good news for buyers?

Yahoo

2 days ago

There's nearly $700 billion in unsold homes sitting on the market nationwide, according to Redfin.
That's a 20.3% jump from a year ago and, at $698 billion, likely adds up to the highest dollar amount ever, the Seattle-based online brokerage said, citing an analysis of the value of listings on Redfin.com from 2012 through April of this year.
And $330 billion of the unsold properties — 2 out of every 5 — are considered 'stale inventory' because they've been on the market for at least 60 days. At 44%, that number is up from 42.1% a year earlier, and the highest for April since the COVID-19 lockdown in 2020.
So what's behind the big numbers? Here's what Redfin says:
More sellers than buyers. Just two years ago, buyers outnumbered sellers but another recent Redfin analysis estimated there are nearly 500,000 more now, 1.9 million compared to 1.5 million. That 33.7% difference is up from 6.5% more sellers than buyers a year ago.
Taking longer to sell. It took 40 days for a typical home to go under contract in April, compared to 35 days a year ago. During the pandemic buying boom, when mortgage rates were still at record lows, it took an average of just 24 days to seal the deal.
Demand down. Polls show buyers are hesitating to make big purchases, due to the economic uncertainty surrounding President Donald Trump's policies, including ever-changing tariffs. Monthly mortgage payments have also reached record highs.
Prices up. In April, the median U.S. sale price for a home was up year over year. But the total value of the current inventory climbed much more, 20.3%, indicating the increase in the number of listings 'is a bigger factor.'
Denver real estate agent Matt Purdy said on the Redfin site that he spotted the trend earlier this year, at the beginning of the critical spring housing market that's supposed to be the busiest time for sales.
'A huge pop of listings hit the market at the start of spring, and there weren't enough buyers to go around,' Purdy said 'House hunters are only buying if they absolutely have to, and even serious buyers are backing out of contracts more than they used to.'
But he suggested there's a silver lining in the shifting market: 'Buyers have a window to get a deal; there's still a surplus of inventory on the market, with sellers facing reality and willing to negotiate prices down.'
Redfin's head of economic research, Chen Zhao, also said buyers may benefit.
'Not only are there more homes for sale than there have been in five years, but the value of those homes is higher than it has ever been,' Zhao said. 'We expect rising inventory, weakened demand, and the prevalence of stale supply to push home prices down 1% by the end of this year, which should improve affordability for buyers because incomes are still going up.'