“It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient,” Yun said. “There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”
“High hopes that the housing market’s returning to normalcy may be coming down to earth, with May showing a 2.7% decline in pending home sales,” NerdWallet home expert Kate Wood added. “Normally, April to May would see a bump as home buying season really gets underway. One big reason contract signings are stalling? There simply isn’t enough supply. Even as home buyers adjust to the new reality of higher interest rates, their home searches remain stymied by lack of inventory.”
Read more: Fannie Mae: “It’s a bad time to buy a home but a good time to sell one”
Ksenia Potapov, economist at First American Financial, agreed. “The spring home-buying season has struggled to gain momentum. Mortgage rates remain high, reducing house-buying power and keeping existing homeowners rate-locked into their homes. As a result, the inventory of homes for sale, which typically increases throughout the spring and summer months, has remained near winter lows.
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