Home prices hit a record new high while inventory fell to a record low, plunging as much as 50 percent year over year in some metros, according to Zillow’s weekly market report for the week ending October 17. The stunning lack of inventory may finally be putting a damper on several months of record home sales, according to the report.
“The housing market’s recent record of superlatives marches on according to Zillow’s Weekly Market Report, as prices soared to new heights and inventory reached record lows — down nearly 50 percent annually in some major metros,” the report reads. “The lack of available homes and an overdue seasonal slowdown may finally be pulling pending sales down after a scorching hot few months.”
Pending home sales are still far ahead of last year’s pace, up 19.6 percent year over year, but are down 4.9 percent month over month and 1.7 percent week over week. Demand is still extremely high — with homes staying on the market just 12 days before going pending — but total inventory has dropped every week since May 23.
As of October 17, there were slightly more than 500,000 homes on the market, down 37 percent from last year’s 863,234. Inventory in Salt Lake City is down 49.9 percent year over year, the biggest drop in the country. Both Charlotte, North Carolina and Riverside, California are down 47 percent in total inventory, year over year.
Residential construction was up slightly in September — an 11.1 percent year-over-year rise — but it’s still below expected levels, when you factor in both demand and builder confidence, according to the report.
Residential construction increased slightly in September and is up 11.1% year over year. However, construction activity is still below expected levels, considering the extreme demand for houses and builder confidence.
The lack of inventory continues to push home prices upward. The median list price for the week climbed 11.7 percent year over year and 0.4 percent month over month to $346,259. Historically low mortgage rates, however, have offset some of the increase, according to the report.