Housing shortage starts easing as listings surge in June

The one-two punch of slow construction and strong demand caused a historic housing shortage.

The number of active listings for homes jumped in June, the fastest annual pace in five years. The number of new listings during the month surpassed pre- Covid levels for the first time. Inventory is still less than it was before Covid.

Austin inventory was up close to 145% from a year ago, while Phoenix inventory was up 113% and Raleigh inventory was up 112%). Supplies are down in Miami, Chicago, and Virginia Beach.

Danielle Hale, chief economist at Realtor.com, said that she expects to see more inventory growth in July as the month progresses.

Hale said that more homeowners could decide to sell as buyers struggle to find homes that fit their budgets.

Home prices are still sky high despite the expanding supply. The median listing price in June was a new high. The annual gains are still up. The share of larger homes is increasing.

According to a new report by ATTOM, the costs of owning the median-priced home in the second quarter required more than the average US wage. It is the highest percentage since 2007, and the biggest jump in more than two decades. The ceiling for approving a mortgage is usually a 28% debt to income ratio. Potential home buyers are no longer able to qualify for a mortgage because of this.

The affordability of buying a home in the second quarter fell in 97 percent of the nation. It was the highest reading since before the housing crash in the Great Recession.

Assuming a loan of 80% of the purchase price and a maximum debt-to-income ratio, ATTOM calculates the affordability for average wage earners.

Rick Sharga, executive vice president of market intelligence at ATTOM said, "With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40% and 50% higher than they were a year ago."

There are a few factors that could affect the continued growth in inventory levels. Hale said that new and pending home sales were up this month, so some people might think now is a good time to buy.

Today's home shoppers could be more motivated now that they're seeing more options to choose from