The housing inventory crunch is finally showing signs of recovery after nearly a year of steady decline, according to a recent Zillow market report, which found a 3.9 percent month-over-month inventory gain in May. That’s the first uptick since July 2020 and only the fifth in the last 24 months, according to Zillow. Of the top 50 largest markets, only six saw their housing inventory fall from April.
Nationally, inventory is down 31.2 percent since May 2020, an improvement over the 32.8 percent annual decline seen in April, according to the report. New inventory has trended up since mid-March.
“Despite extremely strong demand for homes in this red-hot market, a steady increase in new listings appears to have finally started turning the tides, bringing a long-anticipated turn toward more choices for buyers,” Zillow economist Treh Manhertz said in a release. “Builders are rushing to churn out new homes, while widespread vaccinations and improved confidence in the economy should help current owners feel more comfortable listing their homes for sale.”
The typical time for a newly listed home to go under contract dropped to six days, one day shorter than in April, according to the report. The shortest time on market, three days, was found in Midwest metros Cincinnati, Kansas City, Mo., and Columbus, Ohio.
Annual home appreciation reached 13.2 percent in May, while monthly growth was 1.7 percent; both were new records within Zillow data. Typical home values were $287,148.
Month-over-month growth accelerated in 47 of the 50 largest markets. Annually, Austin,Texas, retained its lead in appreciation with a 30.5 percent increase over 2020, followed by Phoenix (23.5 percent) and Salt Lake City (20.6 percent). Even the metros with the lowest annual appreciation, including Orlando, New Orleans, and Oklahoma City, had historically strong numbers above 9 percent.
Zillow economists forecast home values to increase by 14.9 percent by May 2022. Home sales are expected to reach 5.91 million in 2021, a 4.8 percent increase over 2020.