"We are entering the time of year when the number of new listings tends to peak - typically in May or June," Danielle Hale, chief economist at Realtor.com®, notes in her weekly analysis.

To be sure, the seasonal spike may seem less dramatic, as new sellers are still listing fewer homes than at this time last year. The number of new homeowners listing their homes for sale fell 16% in the week ended May 6. Still, the annual decline is steadily narrowing week by week.

"Although there is still a gap, it's smaller than it was for most of March and April," Hale explained.

While the number of new listings is down from last year, total inventory, which includes both new and used listings, rose 31% in the week ended May 6. In other words, there are plenty of homes for sale, although buyers may need to take a second look at outdated listings. That bodes well for a potential boost to the broader housing market and offers hope to buyers and sellers alike.

In short, housing inventories are "evolving," says Mr Heil. "While a further slowdown is needed, this is a welcome improvement as new listings approach seasonal highs. Improvements now could have a huge impact."

We look at the latest episode of How's the Housing Market this Week? What it all means for home buyers and sellers.

What's less optimistic? High mortgage rates have generally held steady. The average rate on a 30-year fixed-rate mortgage was 6.35% in the week ended May 11, according to Freddie Mac, down slightly from 6.39% the week before, but still enough to make many home buyers nervous.

To further complicate matters for buyers, home prices are still slowly rising.

The national median home price in April was $430,000, up from $424,000 in March. But in the week to May 6, prices rose just 2.4 per cent from a year earlier. This is the lowest growth rate since May 2020, when the COVID-19 pandemic raged across the country.

While the drop in prices is a small positive sign for home buyers, it's not enough to really soften their bottom line.

"For potential first-time buyers, this means that affordability will continue to be a top concern," Hale explained. "That means the stock is still relatively expensive for potential sellers."

While sellers are understandably excited about rising prices, they may soon have to cut prices because many homes are sitting on the market with no one asking for directions.

Home sales have slowed over the past 40 weeks, with homes staying on the market an average of 16 days longer in the week ended May 6 than a year earlier.

Home sellers could be in trouble as more properties come on to the market in the coming weeks.

"As the market becomes less competitive, sellers are likely to become more flexible," says Mr Hale. However, the extent of the observed slowdown depends on your local market. For example, homes in the Midwest and Northeast are spending a little more than a week longer on the market than they did a year ago, and we know that housing markets there are doing better as affordability remains in high demand."

But in the South and West, homes stayed on the market two weeks longer in the week ended May 6 than they did a year earlier.

"The key here is that while it's important to understand the national context, it's the trends in the local market that really matter," says Mr Hale.