Real estate agents arrive at a brokers tour showing a house for sale in San Rafael, California. Getty Images

The supply of homes for sale is finally rising, but fewer buyers are able to afford these homes. That could result in a much slower spring market. Spring is usually the high season for housing, but high home prices have been taking their toll for months. The numbers point to potential trouble ahead. The median price of a home listed in February jumped 7 percent annually to $294,800, according to Realtor.com. The price increase came as the number of listings rose 6 percent, with an additional 73,000 listings compared with a year ago. "This is the fifth consecutive month that we've seen housing inventory increase, especially in large markets," said Danielle Hale, Realtor.com's chief economist.

Buyers did come back in January, with signed contracts jumping a wider-than-expected 4.6 percent month to month, according to the National Association of Realtors. Most point squarely to the drop in mortgage rates that occurred in December as the cause for the rebound. Gains were strongest in the South, where prices are relatively low, and weakest in the West, where they are highest. Volume nationally, however, was still lower than in January of last year. "That's a sign that while housing is going to pick up from late 2018's sluggish level, which we expected given lower mortgage rates, it's still at a slower pace than we what saw in early 2018. Affordability continues to be a challenge for first-time buyers," added Hale. The biggest supply increases were in the nation's 50 largest metropolitan markets, where inventory overall was 11 percent higher. The West Coast led the way, with San Jose seeing a 125 percent increase in the number of listings. That is likely because more of these pricey listings are going unsold and piling up. Seattle, also an overheated housing market, saw an 85 percent jump in listings, followed by a 53 percent increase in San Francisco, 39 percent increase in San Diego, and 36 percent increase in Portland, Oregon.

Slashing prices

Sellers are starting to respond by cutting prices. In February, 39 of the 50 largest markets saw an increase in share of price cuts, according to the report. Las Vegas saw the biggest change, a 19 percent jump in the number of sellers slashing their asking prices. That is absolutely due to higher supply. By the end of January, there were 7,254 single-family homes listed for sale without any sort of offer in Las Vegas. That's up 95 percent from one year ago, according to the Greater Las Vegas Association of Realtors. Supply nationally, however, differs dramatically by price point. In February, the number of homes priced at or above $750,000, which is close to three times the national median, increased by 11 percent annually, according to Realtor.com.