U.S. HOUSING INVENTORY GROWS FOR THIRD STRAIGHT MONTH U.S. HOUSING INVENTORY GROWS FOR THIRD STRAIGHT MONTH

U.S. HOUSING INVENTORY GROWS FOR THIRD STRAIGHT MONTH

Wednesday, December 26, 2018

After nearly four years of annual declines in inventory, the number of homes for sale has now increased year-over-year for three straight months. That's good news for home shoppers who now face less competition because homes stay on the market for longer. However, inventory levels are still well below where they were five years ago, and small increases have yet to reverse those deficits meaningfully. Last year, inventory fell 9.1 percent on an annual basis.

Some markets that previously were among the hottest in the country are now seeing the largest increases in available homes, but these are also the places where restricted inventory created more competition for potential buyers.

At the same time, the number of homes available to buyers in Kansas City, Las Vegas, and Washington, D.C., fell at a double-digit pace this past November. This is a sign that the inventory recovery has not reached all the markets.

After a few years of intense inventory shortages and cutthroat competition, small gains in inventory could be embraced by home buyers. Unfortunately, the small recent gains are not anywhere near enough to totally erase the existing deficit, nor are they evenly distributed.Experts say there are roughly twice as many homes available for sale in the higher reaches of the market than there are at the lower, more competitive end. In fact, it's probably more accurate to say that inventory levels are no longer in a free fall and are currently bumping along the bottom. And unfortunately, it's looking more and more unlikely that we'll see a significant upward surge in inventory any time soon. Building activity has been slow at best. And potential sellers may be advised against listing their home for sale in a rapidly rising interest rate environment, when a similar home to the one they're already in - let alone a larger or more expensive one - is likely to cost them more per month. This is a step in the right direction, but there's a long way to go.

The average U.S. home is worth $222,800, up 7.7 percent year-over-year. Las Vegas and Atlanta home values grew the most since last November, with the median home value in each metro area increasing by more than 13 percent. But while Atlanta surpassed its bubble peak value in mid-2017, the Las Vegas market is still 12.5 percent below the highest point it reached during the housing bubble.

Rents slightly increased in November after three months of flat or even decreasing costs. The median U.S. rent is $1,449, up 0.5 percent from a year earlier. Annual rent appreciation slowed since early 2018, even seeing slight declines in the fall.

Mortgage rates ended the month at 4.57 percent, according to Zillow, just above the monthly low of 4.56 percent. Rates peaked at 4.75 percent at the beginning of the month their highest level since 2011. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Thinking of selling, buying, investing or renting in the near future? Contact Elite South Florida Real Estate today!

 
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