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The supply of homes for sale in the United States hit a new milestone during October, a new report released Thursday by Realtor.com shows.
According to the report, active listings soared 33.5 percent year over year in October, reaching the highest levels since 2020.
The monthly report also shows that fewer buyers can take advantage of the surge in inventory, with time on the market continuing to climb amid high listing prices and mortgage rates above 7 percent.
“As the rapid runup in rates reshapes housing market dynamics this fall, both buyers and sellers are taking a step back to recalibrate their plans,” Danielle Hale, chief economist at Realtor.com, said in a statement. “Home shoppers are looking at a monthly mortgage payment that is roughly $1,000 higher than at this time last year, and incomes are rising but not by that much. Combined with asking prices that are still climbing at a double-digit yearly pace, the average American has taken a huge hit to their homebuying power.
“Still, our data indicates that some aspiring homeowners are finding ways to make the most of inventory conditions, such as by exploring relatively affordable metros. For buyers with the flexibility, relocating to a lower-priced market could help offset higher mortgage costs.”
October saw active listings grow at a rapid pace, even as new homesellers declined annually for the fifth straight month, falling 15.9 percent with homesellers reluctant to enter the high-rate market. Pending listings also posted a 30 percent decline.
The report posits that given these corresponding data points — inventory increasing but new listings decreasing — the acceleration in inventory during October can mostly be attributed to weakening buyer demand fueled by the increase in borrowing costs during that month and is accelerating at a rate higher than inflation and incomes.
Of the 50 largest metro areas, 42 posted annual gains in inventory in October led by Phoenix, which saw a 173 percent increase in active listings, followed by Raleigh, which saw a 167.4 percent increase and Nashville, where inventory increased by 145 percent.
The same 50 areas all posted declines for new listings year over year, with the biggest declines in the West at 20.6 percent, followed by the Northeast at 17.4 percent and the Midwest at 15 percent.
Compared to 2020, active inventory was higher in 32 of the 50 biggest markets with the Western market leading by a 33.9 percent increase, followed by Southern metros charting a 7.2 percent increase. Inventory in the Northeast and Midwest remained lower than 2020 levels by 21.1 and 7.9 percent respectively.
