The spike in mortgage rates has set off increases
Housing inventory in previously hot areas rose after the spring home-buying season heated up the tightest markets in the US, according to data from Trulia’s recent study of the 50 largest metropolitan areas.
San Jose saw the largest gain in inventory in the first quarter of 2019, up from 55% from 2018. Seattle, Salt Lake City, and San Francisco followed. However, the number of listings is decreasing in cheaper markets, including Washington, D.C., Baltimore, Kansas City, Mo., and Oklahoma City.
The research showed that homes in several hot areas piled up due to cooling demand, which started when buyers retreated after last year’s mortgage rate hike.
The spike in rates exposed homebuyers in an “an affordability crisis, especially in western urban centers where bidding wars were the norm,” according to an article from Bloomberg. Sales have been slow to rebound even as rates have fallen, Bloomberg reported.
The Census Bureau and the Department of Housing and Urban Development backed Trulia’s data as new home sales dropped 6.9% in January. But the listing supply across all states contrasts on the local level, according to Bloomberg.
Inventory has increased in more than half of the 50 biggest metros, which include Los Angeles, Denver, Nashville, Atlanta, Dallas, and Boston. RE/MAX’s National Housing Report showed that inventory inched up 6.4% year-over-year in January even when home sales moved down 11% on an annual basis.
"Underlying demand remains solid overall, as evidenced by widespread price increases," RE/MAX CEO Adam Contos said. "So the housing market, while not markedly busy in January, remains relatively healthy. Furthermore, with interest rates stabilizing and home-price increases slowing, the spring selling season shapes up to be as interesting as any we have seen in years."
