Resale inventory has hit its lowest level in more than 18 years and continues to decrease as new home construction lags rising demand for housing according to CoreLogic. In this video, Molly Boesel, Principal Economist at CoreLogic explains the ongoing inventory crisis and how it is impacting the entry-level housing market in particular.
“One way to measure for-sale housing inventory is with “months’ supply,” which shows how many months it would take to sell available inventory at the current sales pace, as if no other homes came on the market, which is unlikely but it is a good snapshot to measure health,” Boesel said.
According to Boesel, the months’ housing supply in March 2018 was approximately 3.8 months measured across the country, which means “it would take only 3.8 months to sell all the existing houses listed for sale at the March 2018 sales prices.”
When looked at in terms of different price levels, inventory shortage is even tighter for entry-level homes according to CoreLogic, along with areas of the country with strong job growth such as Denver, Seattle, and San Francisco, all of which have “about two months of supply, making each of those cities a sellers’ market.”