Low-Priced Houses Are Getting Even Harder to Find
November 26, 2019
The supply of homes for sale showed its fifth annual consecutive drop in October, and is particularly dwindling in the lowest end of the market. The supply of lower-end homes is down more than 6% from a year ago for homes priced between $100,000 and $250,000, according to the National Association of REALTORS®.
Housing inventory dropped to a 3.9-month supply by the end of October, NAR reports. For comparison, a 6-month supply is considered a balanced market.
Homebuilders are ramping up supply gradually. But housing analysts say it’s not enough to meet the increase in buyer demand. Supply has plunged 15% for homes priced below $100,000.
As supply tightens, home prices are escalating. In October, the national median home price jumped more than 6% compared to a year ago. That is the highest annual growth rate in more than two years, according to NAR.
Lower mortgage rates are propelling home prices to rise again after being relatively quiet much of last year. Demand is outpacing supply, housing analysts say.
Updated: July 10, 2020