Trulia: Inventory Making Slow, Steady Comeback After Years of Annual Declines
Housing inventory fell 2.5 percent nationally but is starting to climb in some of the most expensive markets.
The number of homes available for sale nationwide is currently higher than at any other point this year, according to the latest Inventory and Price Watch Report from Trulia, a home and neighborhood site for homebuyers and renters. While inventory remains lower than it was a year ago (down 2.5 percent nationally), the number of homes for sale declined in Q3 at its slowest annual pace since 2015 and has actually climbed in a number of notable markets.
Falling inventory and red-hot demand has helped push housing costs up substantially over the past few years – which, when coupled with slow wage growth, has meant affordability has suffered, especially in some of the country's fastest-growing markets. But that is beginning to change: Some of the largest annual inventory gains were in the nation's least affordable markets, including San Jose (66.9 percent), Salt Lake City (45.0 percent) and Seattle (44.3 percent).
2018 Q3 National Inventory and Price Watch
Change, 2017 Q3 – 2018 Q3
Median List Price
Share of Total
% of Income Needed to Buy Median Priced Home in Segment
% Change in Median List Price
Percentage Point Change in Share
% Change in Inventory
Additional Share of Income Needed to Buy a Home (Percentage Point Change)
"Home buyers may be pleasantly surprised to see more homes on the market, as housing inventory starts to make a comeback after years of decline," said Cheryl Young, senior economist, Trulia. "While this is ultimately good news for frustrated buyers, years of steadily increasing prices mean that those hoping to buy a home will need to spend a bigger share of their income once they find one. Nonetheless, those buyers daunted by low inventory and high prices have reason to be cautiously optimistic as parts of the housing market begin to ease."
Modest Relief for Starter Home Inventory Starter homes continue to make up the smallest share of available inventory, however the share of both starter and trade-up homes has grown since this time last year, up 0.4 and 0.9 percentage points respectively. Premium homes made up 50.0 percent of available listings, down 1.2 percentage points from the same period last year.
Growth in Inventory-Starved Areas Over the past quarter, some of the most expensive metros have started to see the biggest increases in inventory. Six of the 10 metros with the largest annual inventory increases are in California including, San Jose (66.9 percent), San Diego (37.7 percent),Ventura County (31.6 percent), Oakland (25.9 percent), Bakersfield (21.4 percent) and Orange County (20.7 percent).
YoY Change in Inventory (2017 Q3 – 2018 Q3)
Rank in Terms of Median Home Price (2018 Q3)
Starter Home Affordability
San Jose, CA
Salt Lake City, UT
San Diego, CA
Ventura County, CA
Colorado Springs, CO
Orange County, CA
Affordability Continues to Plague Buyers While buyers may start to see signs of relief from an inventory perspective, affordability continues to be an issue across all home segments. Nationwide, starter home buyers should expect to pay 25.6 percent of their income toward a mortgage (up 3.3 percentage points from 22.3 percent a year ago), compared to 24.4 percent for trade-up buyers (up 2.3 percentage points) and just 21 percent for premium buyers (up 1.3 percentage points). In an extreme example of income not keeping up with home values, in San Jose, the income required to purchase a starter home is 109.9 percent - completely out of reach for most starter home buyers.
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