While low mortgage rates have made it cheaper to buy a home, finding the right property remains a challenge for home buyers, realtor.com® writes in its October 2019 housing report. Would-be buyers are finding that a worsening inventory shortage is heating up competition in the housing market this fall.
“Owning a home continues to be a priority for buyers as we head into the cooler months of the year,” says George Ratiu, realtor.com®’s senior economist. “Driven by the tailwind of sub-4% mortgage rates, the steady demand for housing is drying marketing inventory at an accelerating pace. With dwindling supply, prices maintain their upward pressure, [exacerbating] affordability challenges for first-time buyers.”
Inventory nationwide fell by 6.9% year over year in October, realtor.com® reports. That equates to a loss of 98,000 listings compared to a year ago. Meanwhile, the median list price was $312,000, which is a 4.3 percent annual increase.
Economists say low mortgage rates prompted greater homebuyer demand in the spring, leaving available inventory depleted this fall. The volume of new listings coming onto the market has fallen by 3.4% since last year. The largest inventory declines have been in price points under $200,000. That segment posted a 15.2% drop year over year in October. The mid-tier inventory—homes priced between $200,000 and $750,000—fell by 4.3% annually, while the nation’s priciest homes—those selling for more than $750,000—rose 1.3% year over year, realtor.com® reports.
Inventory declined by 5.3% in the nation’s 50 largest metros. The areas posting the largest drops were San Diego-Carlsbad, Calif. (down 20.1%); Rochester, N.Y. (also down 20.1%); and Phoenix-Mesa-Scottsdale, Ariz. (down 20%).
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