Tuesday July 5, 2022
The low supply of homes for sale has been the housing market's primary issue for years now. That's why an unexpectedly positive report from the U.S. Census Bureau and the Department of Housing and Urban Development is an encouraging sign for home buyers.
The report shows the inventory of new homes for sale in May was at a 14-year high, with a 7.7-month supply available at the current sales pace. That's good news for home shoppers, since a growing inventory of available new homes is the fastest way to balance the market. It not only provides buyers with more houses to choose from, but also helps relieve upward pressure on prices.
Of course, the number of homes for sale is still much lower than it needs to be, but the recent gains may be a sign that the housing market is trending toward better balance and fewer home price spikes. Also in the report, new home sales increased 10.7 percent in May from the month before. The improvements were unexpected, with economists polled prior to the release predicting sales would fall month over month. (source)