The number of U.S. homes listed for sale rose nearly 3 percent in July compared to June, according to real estate brokerage data that suggested the supply demand imbalance in the housing market could worsen.
The July increase in listings by the Multiple Listing Service (MLS) was the 7th consecutive monthly rise, according to recent data released by Emeryville, Calif.-based ZipRealty .
More inventory on the market could add to existing pressures on home prices — homes for sale are sitting on the market longer, while foreclosures are increasingly prevalent in many cities.
Stabilization of the hard-hit U.S. housing market, where the latest recession took root, is seen as key to the economic recovery in the United States.
The total number of single-family homes and condos listed for sale increased 2.57 percent in July compared to June, bringing the total number of active listings in the 26 major U.S. metropolitan markets to 669,007, the company said. On a year-over-year basis, housing inventories increased by 6.98 percent, it said.
"Buyers are actively shopping for homes, but now that the (homebuyer) tax credits have expired they are taking a 'wait and see' approach," said Patrick Lashinsky, president and CEO of ZipRealty.
"They do not think that interest rates are going to move much, and they do not expect prices to rise much if at all," he said.
While low rates and high affordability helped the housing market to gain ground over the past year, it has struggled since the April 30 expiration of the popular homebuyer tax credits.
To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.
"Partly because buyers do not feel an imperative to act at this time unless they perceive a screaming deal, we are seeing an increase in the percentage of sellers lowering their price to entice buyers," he said.
ZipRealty's Housing Inventory Index for July, compiled from local MLS data, showed that inventory increased in most markets, but some markets experienced a drop in inventory in July compared to June.
ZipRealty said some of the markets with the most significant month-over-month inventory increases include Las Vegas, Nevada, which was up 9.6 percent; and Orange County, California, which was up 7.9 percent.
Markets with the most significant year-over-year increases also included Las Vegas and Orange Country, up 7.2 percent and up 31.7 percent, respectively, the company said.
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