In May, U.S. housing prices hit an all-time high of $297,000 and sold faster than ever before—in just 55 days. But the market also showed hints of slowed momentum, according to Realtor.com’s May 2018 monthly housing trend report, with inventory declining 6 percent year over year in May and increasing 6 percent compared with April 2018. Median listing prices only grew 8 percent year over year for the third month in a row, down from 10 percent in February. Part of this deceleration can be attributed to 557,000 new listings hitting the market in May, the highest number since July 2015.
“We’re in the thick of the hottest home-buying season of all time,” says Javier Vivas, Realtor.com’s director of economic research. “The pace of U.S. home sales has officially reached a seasonal and historical high, but we’re also beginning to see slight signs of deceleration.”
According to Realtor.com, as more and more new listings come onto the market, inventory declines are beginning to lose momentum. On the surface, this offers a glimmer of hope to homebuyers, and if sustained, could plug the supply leak. However, total listing volume remains highly dependent on new construction, much of which is still out of the price range of first-time buyers—the largest segment of buyers.
Even as inventory recovers, the mix of what’s available versus what shoppers are looking for could become an even more pronounced mismatch. Unfortunately, for buyers, median list prices continue to show strong yearly growth and fail to hint that home values will stall any time soon.