Since Realtor.com started tracking the housing market and collecting data on real estate in the US back in 2012, the service has seen the lowest rates in 2020 by far when it comes to housing inventory. There is an evident shortage in the supply of homes, which means that eager buyers will be faced with a challenging spring and perhaps even summer. Moreover, homebuyers have utilized low mortgage rates in 2019 to purchase homes ahead of 2020, which further depleted the housing inventory in the US. Why is there a low housing inventory and a housing shortage?
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Housing Inventory Touching Record Lows
The supply of housing inventory had seen the steepest declines and have touched new lows in the last 4 years. Besides, the supply of homes in the US has dropped by over -13% year-to-year in that period. According to Realtor.com, the latest decline is set at -10% accounting for the period from January 2019 to January 2020. Realtor further claims that the following months are less likely to show any improvements regarding the shortening supply of homes.
Why Is There a Low Housing Inventory?
Chief economist at Realtor.com, Danielle Hale, claims that homebuyers who purchased home sin 2019 took advantage of low mortgage rates, which led to shortening the housing supply further from already peaking shortages. This case further indicates a major change in the housing market, where home prices should grow consequently with fewer homes being listed for sale in 2020.
Inventories Are Dropping, Home Prices Going Up
As a consequence, as inventories are dropping, home prices are going up in all categories. Homes selling below the value of 200,000$ saw a decline in inventory by -19% in the last year. Homes selling at the prices between 2o0,000$ and 700,000$ saw a drop by -12% year-to-year. As the inventory is dropping, prices are rising. Realtor reports 3.4% price rises on home prices year-to-year.
