The number of new homes coming on to the market in the U.S. surged in May after plunging throughout 2012 and 2013.
A new data from the real estate firm Zillow shows that list of all for sale homes across the country spiked 11.8 percent year-on-year with most gains among homes priced in the middle and top one third of home values.
According to the analysis, the number of homes available for sale in the most affordable price bracket, those homes most sought by first time buyers, fell year-on-year in 28 of the nation's largest metro areas.
Overall inventory of for sale homes was up year in 78 percent of the more than 600 metro areas analysed. Metros such as Las Vegas, Washington, DC and Riverside, California increased. Las Vegas was up 51.5 percent year on year, Washington, DC up 45.7 percent and Riverside, California up 42.7 percent.
"It's good to see overall inventory rising. It's likely that many would be sellers have decided to capitalize on recent home value gains, particularly as the pace slows, and list their home for sale now in order to move into a new home while mortgage interest rates remain low," said Zillow chief economist Stan Humphries.
"But persistent inventory constraints at the low end of the market continue to make it a tough environment for first time and lower income home buyers. Low inventory and high demand can lead to rapid price spikes, which make homes even more difficult to afford for many buyers. Hopefully the inventory gains we're seeing in the middle and upper tiers of the market will begin trickling down to the most affordable homes soon" he explained.
The data also showed that in 27 of the top 30 metros more than one third of all sales of the lowest priced homes were made with cash. In three of the top 30 metros, Tampa, Detroit and Miami, more than 80 percent of all sales in the lowest price bracket were cash deals.
The rent across the country dipped slightly in May from April, down 0.1 percent to a Zillow Rent Index of $1,310. Year on year, national rents were up 2.3 percent in May.
