More houses are coming on market for sale, report finds

If increases continue, fierce competition for buyers may ease.

Some good news for homebuyers: More houses are coming on the market, according to a recent report from Realtor.com.

Active listings, which refer to all homes on the market during any given period, rose 5% during the week that ended May 14, compared with that same week in 2021, the biggest jump since March 2019. New listings, which refer to homes first placed on the market during a given period, rose by 6% that week, compared with that same week in 2021.

Typically, May is the month with the highest number of new listings, according to Realtor.com. However, even with the uptick in inventory, buyers have just two homes to consider for every five homes that were available before the pandemic, according to Realtor.com’s analysis.

Homes spent fewer than six days on the market during the week ending May 14, compared with a year ago. In addition, homes sold faster in April 2022 than at any other time on record, according to Realtor.com. Homes usually sell fastest in the summer months.

Still, the trend appears to be in place for continued increases in houses for sale, which could ease the competition for buyers.

Buyers in many markets face competition from institutional investors who buy homes for single-family home rentals or to improve and sell. The National Association of Realtors recently investigated the impact of these investors on the housing market. According to NAR’s report, institutional buyers — defined as entities identified in deeds data as corporations, companies or limited liability companies — accounted for 13.2% of residential purchases in 2021. This is higher than the 11.8% in 2020 but below the peak share of 15.7% in 2014.

The study found that on average, 42% of single-family properties purchased by institutional buyers were converted to single-family rentals. The rest were sold directly to buyers or were part of a rent-to-own or shared equity arrangement with future owners.