Are Home Inventory Problems Over in US?

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Two major U.S. listing sites are reporting an increase in homes for sales, suggesting the inventory issues restricting the market may be coming to an end.

Realtor.com, the listing site of the National Association of Realtors, reported a 5.82 percent increase from April to May in the number of homes for sale on the site. That's still 10.11 percent below the supply a year ago, but the number of listings is up 25 percent from the beginning of the year.

Several markets, including Sacramento, San Francisco and Washington D.C. saw double-digit increases in the number of homes listed for sale, Realtor.com reports.

Meanwhile listings site Zillow reports that the inventory has "turned a corner," with year-over-year inventories improved in June compared to January in 70 metro markets. Phoenix, San Diego and Minneapolis showed the largest gains.

"It has always been just a matter of time before more supply came on the market to meet this demand, as homebuilders built more new homes and sellers entered the market to capitalize on recent robust appreciation in their own homes," said Zillow chief economist Dr. Stan Humphries.

"Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing. But a corner has been turned."

The lack of homes for sale has been cited as the biggest issue facing the housing recovery in the U.S. and the biggest reason for the recent jump in prices. Many sellers have been reluctant to put their homes on the market until they were sure the market was improving, many analysts believe. Others are still "underwater"--owing more on their homes than the property is worth.

But evidence is mounting that the situation may be easing. In May 70 percent of the sales handled by Redfin received multiple offers, down from 73.3 percent in April.