- Housing supply grew 9% the week of May 15 from the year prior, the highest uptick in five years.
- The increase will likely cool home price increase rates and give buyers more options.
- But with inventory still at a historic low, homes aren't likely to get much more affordable soon.
There finally seems to be a ray of light on the horizon for those itching to buy a home.
Between May 15 to May 21, the number of homes on the market was 9% higher than the same time period a year ago — the fastest year-over-year rate since 2017, Realtor.com's weekly housing data report shows.
The spike in inventory is likely the result of fewer homebuyers in the market than there have been over the past two years. In April new home sales hit a pandemic-era low, according to the US Census Bureau.
This means buyers, who have been facing increasingly paltry supply for years while prices have shot up, could be in for a bit of a break if they decide to venture out to search for a home, according to Realtor.com's chief economist Danielle Hale.
"Recent inventory improvements are expected to eventually tip market conditions in a buyer-friendly direction, and one we expect to provide relief from surging asking prices later in the year," she said.
But even though buyers may see more houses for sale than last year, your dream home is not likely to be any cheaper.
In fact, with mortgage rates up over 2 percentage points from January and prices 16.6% higher than the same week last year, according to Realtor.com, it was more expensive to buy a home in mid-May of 2022 than it was in 2021.
A recent Insider analysis found that higher mortgage rates mean that monthly payments on a $425,000 house could be $500 more than they were at the end of 2021, which would add up to over $185,000 over the course of a typical 30-year mortgage.
And the US housing market is still far from getting significantly more affordable any time soon, experts say.
That's because the number of houses on the market is still at a historic low point, and even big upticks in the number of homes for sale are not going to make a big enough dent to bring down prices in the short term.
According to the National Association of Realtors, in April 2022, listing inventory was just over 1 million. Over the past 15 years, the only period it was lower was between November 2021 and January 2022.
"Even if inventory doubled, or even tripled in some markets, it would still be historically low," Miller Samuel CEO Jonathan Miller, an appraiser who compiles market reports for over 30 markets for Douglas Elliman, told Insider last month. "There's a very firm underpinning on pricing."
In the mean time, the recent uptick in homes listed could propel even more homes onto the market – particularly ones that could be more affordable.
"With nearly three-quarters of this year's sellers also planning to buy a home, the rise in new listings may kick start a virtuous cycle, reinforcing the trend by attracting even more homeowners into the market," Hale said in the release.
"Put simply, what's good for the buyer is also, in many cases, good for the seller," she added.