While home prices continue to climb, the good news is that the number of homes for sale nationwide increased by 3.9 percent in May, only the fifth gain on a month-by-month basis in the last 2 years.

Within the fifty largest markets in the U.S., only six saw housing inventory fall from April. However, in keeping things in perspective, the number of home on the market is down 31.2 percent from May 2020.

According to analysts, most of the increase in inventory is due to an increase in new construction activity.

According to the November Zillow Real Estate Market Report the number of homes for sale has increased year-over-year for three straight months after four years of annual declines.

Many of the most significant increases are in some of the country’s hottest markets (think San Jose and San Francisco) but these are also areas with the most potential buyers so competition remains fierce.

Nationwide, the median home value is $222,800 up 7.7 percent year-over-year.

It’s been a constant theme for awhile now but according to Zillow’s Real Estate Market Reports for May the number of for-sale homes on the market is dropping at the fastest pace in nearly four years.

Nationwide, there are 9 percent fewer homes for sale than a year ago in 2016. San Jose has approximately 30 percent fewer home on the market than a year ago.

Moreover, new home construction is unable to keep up with demand and likely out of the price range of most first-time buyers. Compounding the problem are investors who buy new homes with the intention of renting.