In April, the South accounted for 56.7 percent of available housing inventory, as revealed by a recent report. This region has experienced a surge in affordable housing options.
The South is emerging as a promising destination for prospective homebuyers, offering an affordable housing boom, as indicated by recent data. According to a new report by Realtor.com, a significant portion—56.7 percent—of all available homes in April were situated in Southern states.
This surge in housing inventory represents a noteworthy increase of 19.7 percent year-on-year. In comparison, inventory rose by 18.4 percent in the Midwest, 7.5 percent in the West, and 2.9 percent in the Northeast. These statistics reflect a notable shift in the housing market, which has long grappled with a national housing shortage, artificially inflating prices amidst soaring mortgage rates.
However, Realtor.com‘s analysis offers a glimmer of hope, suggesting a turning tide. Over the past three months, the influx of homes priced between $200,000 and $350,000 entering the market has outpaced all other pricing categories. This trend signals an increase in more affordable housing options, particularly in the South.
The Southern metro areas experiencing the most significant growth in inventory are primarily located in Florida. Tampa led the pack with a remarkable 69.5 percent increase in available homes, followed by Orlando and Jacksonville, recording increases of 64.2 percent and 59.1 percent, respectively.
Realtor.com’s chief economist, Danielle Hale, commented on the trend, noting, “The number of homes actively for sale was notably higher compared with last year. Sellers continued to list homes at a greater rate than last year, leading to a promising increase in more affordable homes for sale, especially in the South.”
Despite this surge in housing inventory, house prices across the board experienced seasonal growth, rising from $424,900 in March to $430,000 in April. However, this figure remained flat compared to the previous year.
Hale elaborated on the implications of this pricing trend, stating, “On the one hand, there is a small contingent of buyers who are really rooting for home prices to collapse so that affordability improves and they can become homeowners. This group is probably disappointed by flat pricing. But when affordability is at long-term lows, a flat price trend is one way that the market corrects.”
Despite experts’ predictions of decreased demand due to high mortgage rates, the housing market has remained surprisingly buoyant. The average rate on a 30-year fixed-rate home loan currently stands at 7.17 percent, driven up by the Federal Reserve’s aggressive tightening cycle, reaching a 23-year high.
This rise in mortgage rates translates into significantly higher monthly payments for homebuyers. For instance, a buyer purchasing a $400,000 property with a 10 percent downpayment would face monthly payments of $2,436, compared to just $1,513 per month in April 2021, when rates were 2.98 percent.
Despite these challenges, buyers remain incentivized by expectations of potential interest rate cuts by the Federal Reserve later this year. However, a persistent shortage of homes continues to exert upward pressure on prices, countering the dampening effect of dwindling demand.
