Pace of New US Home Listings Slows in May

On Friday, Redfin reported that new listings of US homes for sale rose 6.3% year-over-year during the four-week period ending June 1, one of the smallest increases of the past three months.

New listings declined year-over-year in 11 of the 50 largest metro areas, with the steepest drops in San Jose, California, and four Florida metros: Orlando, Fort Lauderdale, Tampa, and West Palm Beach.

Zooming in on recent weeks, Redfin noted that new listings fell during the second half of May. While a decline after mid-May is typical, this year’s drop was the largest for that period in a decade.

On the buying side, pending home sales slipped 0.4% year-over-year to their lowest May level since 2020, and mortgage-purchase applications fell 3% from the previous week. Redfin attributes the pullback to near-record housing costs, driven by a 1.2% year-over-year increase in the median sale price and mortgage rates nearing 7%—as well as broader economic uncertainty.

Despite more sellers than buyers in the market and overall gains in new listings, the recent dip in listings suggests some would-be sellers are stepping back. The typical home now sells for about 1% below its asking price—the largest discount for this time of year since 2020—and only 28% of homes are selling above asking, down from 32% a year ago.