Current housing market trends: inventory rises, prices stabilize, sellers adjust
May’s housing data reveals a market in gentle transition—buyers gain more options, home prices are steady, and sellers are increasingly open to negotiation.
1. Inventory soars (but still below pre‑pandemic levels)
- Active home inventory surged 31.5% year-over-year, marking the 19th consecutive month of annual growth. The count rose above 1 million—the highest since winter 2019.
- Despite this rise, inventory remains 14% below the typical levels seen pre-pandemic (2017–2019).
- Listings under contract (pending sales) also climbed 20.8% year-over-year, reflecting increased availability.
2. Buyer demand softens as mortgage rates climb
- Pending sales dipped 2.5% compared to last May, hinting at rising mortgage rates impacting buyer interest.
- Mortgage rates surged toward 7% in mid-May, squeezing affordability, and pushing buyers—and sellers—to reconsider their positions.
3. New listings still coming, but slowing
- New listings were 7.2% higher year-over-year, although slightly down month-to-month, suggesting a gradual cooling of spring activity .
- Regionally, the South saw the biggest rise in fresh listings (+10.2%), followed by the West (+9.2%), Midwest (+8.2%), and Northeast (+3.0%)
4. Time on market edges up—but still near normal
- Homes sat on the market for a median of 51 days, six days longer than last year and close to pre-pandemic norms
- This marks the 14th straight month of slower sales, a sign of a gradually softening but stabilizing market
5. Prices holding steady — but sellers are cutting
- The median list price remained at $440,000, virtually unchanged from last May, while price per square foot edged up 0.6 %, signaling modest value growth
- Sellers are applying more price cuts:
- 19.1% of listings reduced prices—the highest for any May since July 2016.
- Marked for the 5th consecutive month, highlighting seller willingness to negotiate as affordability dips
6. Regional snapshot
| Region | Inventory YoY | New Listings YoY | Price/SF YoY | Days on Market Change | Price‑Reduced Share |
| Midwest | +22.9% | +8.2% | +1.0% | +3 days | +1.9 pts |
| Northeast | +19.0% | +3.0% | +3.1% | +1 day | +1.4 pts |
| South | +32.9% | +10.2% | –0.3% | +6 days | +1.6 pts |
| West | +40.7% | +9.2% | +1.0% | +5 days | +4.5 pts |
- West and South lead in supply and new listings—but price per square foot dipped slightly in the South
- Northeast and Midwest linger behind pre-pandemic norms in supply recovery
What this means for buyers & sellers
For buyers:
- More options and modestly slower markets give better negotiating power—especially as more homes are seeing price reductions.
- Still, with mortgage rates near 7%, affordability remains tight.
For sellers:
- Pricing competitively is crucial. Over one in five listings are seeing reductions this season.
- Expect a slower pace—if you need to sell, be ready to adjust your timeline or ask price.
Market outlook:
- With inventory growing but still lagging behind 2017–2019 levels, supply and demand are inching toward balance.
- Mortgage rate uncertainty and affordability pressures may keep the market cautious through summer.
Final takeaway
May’s data marks a slow but steady pivot. Buyers gain leverage, sellers must adapt, and the hike in inventory plus stable prices suggests a market entering a phase of cautious normalization. If you are thinking about getting into the housing market, speak with one of our knowledgeable loan officers or start the pre-approval process today!
Source: Realter.com
