Robust growth in demand for housing as well as supply are helping the housing market to maintain spring momentum and boost sales for the summer, according to Realtor.com's Advance Read on June Trends report released Tuesday.
Realtor.com's report found that a 4 percent month-over-month increase in supply and demand for housing helped home sales maintain their spring momentum into the June. The "advance read" report covers residential supply and demand trends during the first three weeks of each month.
"Factors lending themselves to the market’s upswing are the psychological effect of recently increased mortgage rates as well as the specter of the Fed raising interest rates later this year," Realtor.com Chief Economist Jonathan Smoke said. "Although demand has been strong all year, in June we’re finally beginning to see an uptick in supply as sellers become more confident about home prices."
The increasing number of first-time homebuyers is another factor driving up the demand for housing, according to Realtor.com. Many of those first-time buyers are millennials who have been sidelined by the challenging market conditions; Realtor.com reported in a survey of site visitors in June that 65 percent of older millennials (those ages 25 to 34) stated their intention to purchase a home within three months – a year-over-year increase of 12 percent.
Realtor.com found that due to tight housing supply and economic-powered demand growth, California dominated the list of "hottest" housing markets in the nation in June with five markets in the top 10 and eight markets in the top 20. San Francisco moved into the top position in June, taking over for Denver, which ranked first in May but fell to third. Vallejo-Fairfield, California, moved up from fifth in May to second in June. Other California markets ranking in the top 10 were Santa Rose (fourth), San Jose (sixth), and Santa Cruz (10th).
Texas had the second-most markets on the top 20 "hottest" list with four. At fifth, Dallas-Fort Worth was the highest-ranking Texas market. Realtor.com ranked the "hottest" markets based on number of views per listing on its website and the median age of housing inventory.