Rising home prices paired with the longest economic expansion is U.S. history has caused affordability to plummet. The result of this has been increasing inventory, and CoreLogic reported that the number of for-sale homes in June equated to a 3.3-month supply.
June’s reported number is a year-over-year increase from the 2.8-month supply in June 2018. Home supply peaked in 2008, but fell due to the effects of the Great Recession.
When broken out by price tier, the lowest-priced homes had a 3.5-month supply in June, which rose three months from last year, but just one-third of its peak in January 2008. The low-to-middle-price tier saw an annual increase of 2.2 months in June.
Moderately-priced homes had a 2.8-month supply, which is a marginal increase from the 2.3-month supply last year. High-priced homes had the largest supply, 3.9 months, and is only a 0.6 month increase from June 2018.
Homes aren't lasting long on the market as demand is rising. CoreLogic reports that the volume of homes selling within 30 days of listing is at its highest level since 2000. Homes sold within 30 days of listing in June was 26.2% higher than the pre-crisis peak of 20.8%, which was set in August 2004.
The amount of for-sale homes that were on the market for more than 180 days was 20.3%, which is similar to the 2018 average of 19.2%, but just half of the March 2009 peak of 36.1%.
Inventory rose 7.5% annually in metropolitan areas across the nation to 3.3 months. Out of the 20 metropolitan markets studied, 18 showed year-over-year increase in supply.
Miami, Florida, had the largest increase in supply, rising 2.1 months to 9.8 months in June 2019. Houston, Texas, was a distance second with around 5 months, and was followed by Los Angeles, California; Chicago, Illinois; and Las Vegas, Nevada.
Although inventory increased, sales of new, single-family homes fell month-over-month by 12.8% in July, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The report states that an estimated 635,000 homes were sold for the month, far below the estimated total for June of 728,000. New home sales, though, represent a year-over-year increase of 4.3%.
“As summer temperatures rose homebuyers moved to cooler vacation spots for some respite. Even with mortgage rates below 4%, new home sales declined in July, to a pace of 635,000 units, down 12.8% from June … While consumer optimism remained upbeat and resulted in higher retail spending, the prospect of continuing low mortgage rates has removed the sense of urgency for buyers of new homes,” said George Ratiu, Senior Economist at realtor.com.