Home prices grew to an average of $305,000 last month
The US housing market is showing signs that it may be pointed towards another shortage, according to realtor.com
The monthly housing trend report from realtor.com showed that increased demand from low mortgage rates spurred a 10% year-over-year decrease in available homes, while price growth moderated to 4.3% month-over-month to an average of $305,000 in September.
The national inventory of homes for sale continued to drop last month, down 1.8% from August and 2.5% from this time last year.
"Buyers looking for their next home have faced the headwinds of tight inventory and a competitive market this year,” said George Ratiu, realtor.com’s senior economist. “While lower mortgage rates and the arrival of fall promised a reprieve, conditions continue to tighten as demand remains strong. September inventory trends, especially in the mid-market, may be the canary in the coal mine that we could be headed for even lower levels of inventory in early 2020."
With strong demand and short supply, the percentage of entry-level homes under $200,000 fell 9.8% annually. Mid-market homes priced between $200,000 and $750,000, which comprise the largest segment of inventory, posted 0% inventory growth.
Realtor.com expects the mid-market inventory to decline next month, which translates into increased competition for move-up buyers. Only the supply of homes priced over $750,000 continued to grow, rising 4.7% annually.
"The mid-tier of housing represents nearly 60% of homes for sale on the market, making it a solid indicator of how tight inventory levels are in the US,” Ratiu said. “After more than a year and a half of solid growth in this segment, we're seeing inventory levels stall out and flat-line. If, or better yet, when inventory in this segment begins to take a downturn, the vast majority of homebuyers are going to feel its effects as their options rapidly dwindle.”
