Housing inventory across the nation fell annually by 13.6% in January during the same period where the average home price rose 3.4% to $300,000, according to realtor.com.
January’s drop is the largest annual decline in four years and brings the supply of for-sale homes to its lowest level since realtor.com began tracking data in 2012.
According to the data, the decline represents a loss of 164,000 listings across the nation. The number of newly-listed properties also fell by 10.6% from last year.
“Homebuyers took advantage of low mortgage rates and stable listing prices to drive sales higher at the end of 2019, further depleting the already limited inventory of homes for sale. With fewer homes coming up for sale, we’ve hit another new low of for sale-listings in January,” said Danielle Hale, realtor.com’s chief economist. “This is a challenging sign for the large numbers of millennial and Gen Z buyers coming into the housing market this homebuying season as it implies the potential for rising prices and fast-selling homes—a competitive market.”
San Jose, California, saw inventory fall year-over-year 40% in January, while prices grew by more than 10%.
The entry-level market was hit hardest by the decline in supply. Properties priced under $200,000 saw inventory fall by 19% annually—an increase from December 2019’s 18.1%.
Mid-tier properties (priced between $200,000 and $750,000) saw supply fall by 12% year-over-year compared to December’s 10.2% decline.
The supply of homes priced over $750,000 fell 5.9% year-over-year, which is also an increase from December’s drop of 4.4%.
Average listing prices rose by 3.4% annually to $299,995 in January. Prices in 18 metros, though, rose by more than 10% year-over-year. The report states that of the 50 largest metros, 46 saw annual average price gains, with Philadelphia’s 16% hike leading the nation.
Phoenix’s had the highest year-over-year median price growth of 14.5%. The average home price in the metro was $399,750.
San Jose had the highest average home price of the 50 largest metros at nearly $1.1 million.