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52 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Higher Home Costs Spurring Moderation in Buyer Demand The typical home spent 26 days on market in May, while asking prices for homes broke another record, as the national median listing price for active listings soared to $447,000. N ew data suggests the U.S. housing market may have hit a turn- ing point in its supply struggle in May, as active inven- tory recorded the first year-over- year increase since June 2019, according to the latest Realtor. com Monthly Housing Trends Report for May. Meanwhile, the median na- tional home price surged to an all- time high of $447,000, and buyers snatched up listings a week faster than the same period in 2021. "Among key factors fueling the inventory comeback are new sellers, who are listing homes at a rate not seen since 2019, as well as moderating demand, with pending listings declining year over year in May," said Danielle Hale, Chief Economist for Realtor. com. "While this real estate refresh is welcome news in a still-undersupplied market, it has yet to make a dent in home price growth, partially due to increases in newly-listed, larger homes and because the typical seller outlook is quite high, likely shaped by recent experiences of homeowners who sold. Importantly, as 72% of this year's sellers also plan to pur- chase a home, seller expectations will likely start to reflect buyers' needs. In an early sign, the rate of sellers making price cuts acceler- ated in May." The U.S. inventory of active listings grew year over year for the first time since June 2019, with this comeback driven by two key trends: • New listings reached the high- est level of any month in nearly three years, as rising num- bers of sellers might be more confident in pursuing plans to list than last Spring when COVID-19 vaccines were just rolling out. • Higher housing costs are spur- ring a moderation in buyer demand, reflected in May's bigger year-over-year declines in pending listings—those at vari- ous stages of the selling process that are not yet sold—compared to April, a sign of softening in the turnover rate of for-sale homes. Nationally, the number of active listings increased 8.0% year over year in May but remained 48.5% below typical levels in May 2020 at the onset of COVID-19. Compared to last month's year- over-year changes, May's national data showed a significant improve- ment in the new listings trend (+6.3% vs. 1.3%) and a bigger decline in pending listings (-12.6% vs. -8.7%). Among May's new listings, the share of smaller homes—up to 1,750 square feet—declined year over year (to 45.7% from 47.3%), while those with 1,750-plus square feet increased from 52.7% to 54.3%. On average in the 50 largest U.S. markets, active inventory grew by double-digits (+14.9%) over May 2021 levels, with the biggest increases in the West (+33.6%) and South (+18.3%), led by Austin, Texas (+85.8%); Phoenix (+67.1%); and Sacramento, California (+54.6%). Active listings declined on a year-over-year basis in just eight markets. Thirty markets posted annual gains in newly listed homes, with the biggest increases registered in southern metros: Raleigh, North Carolina (+27.9%); Nashville, Tennessee (+22.8%); and Las Vegas (+20.7%). May's increase in for-sale home options combined with softening buyer demand would typically drive a cooldown in home prices, but data shows that is not yet the case. In fact, the yearly growth rate in the U.S. median listing price accelerated from last month's pace as the median listing price approached $450,000 after just crossing the $400,000 threshold in March. From asking prices per square foot to pending listing prices, May housing trends suggest that a few factors are potentially driving the continued home price surge. These include a rising share of newly listed, larger homes by square footage, and some sell- ers not yet adjusting to shifting supply and demand dynamics, including buyer interest in less expensive homes. The U.S. median listing price hit an all-time high of $447,000 in May, rising at a faster year-over- year pace (+17.6%) than last month (+14.2%). On a square foot basis, asking prices for active listings