Housing supply in markets across the country is in extremely short supply, so much so that home buyers may well find it difficult to find a suitable property this spring.
Indeed, the country’s existing housing supply declined by its steepest year-over-year decrease for 4 years in January, falling by 13.6%, according to realtor.com. The supply of homes for sale in the U.S. is now at its lowest level since realtor.com began tracking the data in 2012, it said.
Worse still, the shortage is unlikely to be relieved any time soon, realtor.com said. Volume of newly listed homes is also down, by 10.6%, since last year.
Danielle Hale, realtor.com’s chief economist, said that homebuyers in the past year have taken advantage of low mortgage rates and more stable listing prices, and the result has been a depletion of an already limit inventory of homes to buy.
“With fewer homes coming up for sale, we've hit another new low of for sale-listings in January,” Hale said. “This is a challenging sign for the large numbers of Millennial and Gen Z buyers coming into the housing market this homebuying season as it implies the potential for rising prices and fast-selling homes—a competitive market. In fact, markets such as San Jose in Northern California, which saw inventory down nearly 40 percent last month, are also seeing prices grow by 10 percent while homes are selling at a blistering pace of 51 days."
The shortage of homes is being felt across all price points, not only the entry-level segment, although that’s where it remains most evident. In January, there was a 19% drop in inventory of homes priced under $200,000, while homes in the $200,000 to $750,000 price bracket fell 12%. And even in the upper tier of homes priced above $750,000, inventory fell by 5.9%
As inventories fall, home prices are rising. The median U.S. listing price increased by 3.4 percent year-over-year, reaching $299,995 in January.