The number of U.S. homes listed for sale rose in August compared to July, marking the 8th consecutive monthly rise, according to data released by real estate brokerage ZipRealty.
The trend is likely to continue this year as a large number of foreclosed properties come on the market, according to Emeryville, California-based ZipRealty.
Homes are sitting on the market longer and more inventory could add to existing pressures on home prices. Stabilization of the hard-hit U.S. housing market, where the latest recession took root, is seen as key to economic recovery in the United States.
The total number of single-family homes and condos listed for sale by the Multiple Listing Service (MLS) increased in August from July by 0.43 percent, bringing the total number of active listings in the 26 major U.S. metropolitan markets to 671,874, ZipRealty reported.
On a year-over-year basis, housing inventories increased by 10.65 percent, it said.
Sellers are realizing that they cannot sell at the price they want, so we do expect sellers to take their homes off the market, said Patrick Lashinsky, president and CEO of ZipRealty. I think housing inventory will continue to increase over the rest of the year - - with distressed homes coming on the market faster than normal sellers can take them off.
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 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.
A seller that has their home on the market for six months and has not gotten an offer at a price they want - - it is realistic to take it off the market and try again at a later date, he said.
The hangover effect from the tax credits will be over by spring and we will have a better sense of where we are with unemployment, he said.
ZipRealty's Housing Inventory Index for August, compiled from local MLS data, showed that inventory increased in many markets, while some markets experienced a drop in inventory in August compared to July.
ZipRealty said some of the markets with the most significant month-over-month inventory increases include Las Vegas, Nevada which was up 9.3 percent; and Phoenix, Arizona, which was up 4.6 percent.
Markets with the most significant year-over-year increases also include Las Vegas and Orange Country, up 21.2 percent and up 42.8 percent, respectively, the company said.
(Reporting by Julie Haviv; Editing by Andrew Hay)