The number of homes for sale on the market fell for the fifth straight month in September amid the already severe housing shortage.
A new report from Realtor.com shows that the total number of homes for sale, including homes that were under contract but not yet sold, fell by 4% in September compared with the same time a year ago.
On top of that, available home supply remains down a stunning 45.1% from the typical amount before the COVID-19 pandemic began in early 2020, according to the report.
"Inventory remains constrained as homes sell at a fairly quick pace," the report said. "Buyers continue to contend with high listing prices, mortgage rates, and lower inventory than last year."
Still, there are some signs of improvement on the inventory front. The report indicated that total inventory rose in September from the previous month "more than can be expected for this time of year."
The lack of available homes for sale is driving home prices higher, even though mortgage rates are hovering near the highest level in two decades. Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.
The national median list price was up 0.4% in September from the same time last year. However, there is some evidence that prices are beginning to cool off.
"While the inventory crunch continues to support listing prices, there are some signs of adjustment, as the share of home listings which have had their price reduced in the last month increased more than expected for this time of year," the Realtor.com report said.
The Federal Reserve's aggressive interest-rate hike campaign sent mortgage rates soaring above 7% for the first time in nearly two decades last year. Rates have been slow to retreat, but home prices have remained stubbornly high as buyers deal with limited inventory.
Rates on the popular 30-year fixed mortgage surged to a fresh high of 7.49%, Freddie Mac reported last week, above the 6.66% rate recorded one year ago and the pre-pandemic average of 3.9%.