3rd Look at Local Housing Markets in May

Inventory Up, Sales Down, New Listings Picking Up

This is the third look at local markets in May. I’m tracking about 35 local housing markets in the US. Some of the 35 markets are states, and some are metropolitan areas. I update these tables throughout each month as additional data is released.

We are seeing a significant change in inventory, and maybe a pickup in new listings. So far, most of the increase in inventory has been due to softer demand - likely because of higher mortgage rates - but we need to keep an eye on new listings too.

On a national basis, we saw record low inventory levels over the Winter. Last year, inventory didn’t bottom seasonally until early April. This year inventory bottomed in February (normal seasonal timing), and recent data from Altos Research and Realtor.com, indicate active inventory was up year-over-year in May. I expect the local market reports will show inventory up year-over-year in May too.

Active Inventory in May

Here is a summary of active listings for these housing markets in May. Inventory usually increases seasonally in May, so some month-over-month (MoM) increase is not surprising.

Inventory in these markets was down 24% YoY in February, down 15% YoY in March, down 4% YoY in April, and up 16% YoY in May! So, this is a significant change from earlier this year.

This is another step towards a more balanced market, but inventory levels are still historically low.

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), North Texas (Dallas) and Santa Clara (San Jose), Mid-Florida (Tampa, Orlando), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver or Minneapolis (included in state totals).

   

New Listings in May

And here is a table for new listings in May. For these areas, new listings were up 6.0% YoY.

Last month, new listings in these markets were down 5.0% YoY. This could be a significant change, and the first sign of a pickup in new listings. If new listings increase, combined with less demand, we will see active inventory increase quickly.

Closed Sales in May

And a table of May sales. Sales in these areas were down 5.8% YoY, Not Seasonally Adjusted (NSA). There was one extra business day in May 2022 compared to May 2021, so the Seasonally Adjusted headline number will likely show a larger decline than 5.8%.

The National Association of Realtors (NAR) is scheduled to release May existing home sales on Tuesday, June 21, 2022, at 10:00 AM ET. The consensus is for 5.41 million SAAR.

Housing economist Tom Lawler expects the NAR to report “seasonally adjusted annual rate of 5.35 million in May, down 4.6% from April’s preliminary pace and down 9.6% from last May’s seasonally adjusted pace.”