Home sellers are reentering the market, but buyers are still hesitant. New house listings have increased significantly compared with last year, surpassing sales and reducing buyer competition and price growth, according to recent data from housing market platform Zillow.
In May, new listings from sellers rose 8% from the previous month and 13% year-over-year, despite many homeowners still holding onto their low mortgage rates. However, buyers aren't matching this increased activity. Sales in May were 6% lower than the previous year, helping to boost market inventory by 22% compared with last year's low. Inventory is still 34% below pre-pandemic levels, but this is the smallest gap in more than three years.
As a result, competition among buyers eased in May and home price appreciation cooled with it. Growth in the Zillow Home Value Index slowed from 4.4% year over year in April to 3.9% in May, while monthly appreciation ticked down from 1.2% in April to 0.8% in May. Home values are now 45% above what they were before the pandemic.
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