There just aren’t enough homes to go around in today’s housing market.
Even as more homebuyers attain financial security and strong enough credit to qualify for a loan, they’re being shut out because of a dearth of homes of sale in many markets, according to a new report from Zillow.
After several years of declining inventory, homebuyers now will find 9 percent fewer homes for sale than a year ago, the greatest drop in inventory in nearly four years. Inventory is falling even faster in some markets. There were 30 percent fewer homes in Columbus, Ohio, San Jose, California, and Minneapolis last month.
The lack of inventory reflects slow-moving new construction and the conversion of many single-family homes into rentals following the housing bust. There are 6.2 million more single-family home renters now than there were in 2005. A growing number of renters want to shift into home ownership, but that growing demand simply makes the lack of inventory even more acute.
“There is no silver bullet that will clear the market of all of these issues, and buyers frustrated by the status quo will likely have to remain patient and be ready to pounce once that perfect home does become available,” Zillow Chief Economist Svenja Gudell said in a statement.
The imbalance in the housing market continues to push prices up, with the median home value rising 7.4 percent to nearly $200,000, according to Zillow. Median rents ticked up slightly to $1,416 per month.