Number of Homes for Sale Increased in October

For the first time in four years, the number of U.S. homes for sale has increased. The inventory of homes for sale went up 2 percent in October, compared with the same month last year. Could this be a sign that the housing market is finally balancing out?

A lack of available homes for sale has been an issue in the U.S. for quite some time, leading to price jumps and bidding wars while keeping a growing population of younger buyers out of the market. While this most recent change could signal a much-needed improvement, experts say it could take more time before a truly balanced market exists.

25,000 New Home Listings in October

According to a report from realtor.com, there was a net increase of 25,000 home listings in October, marking a significant change from the severe shortage we’ve been seeing. Also worth noting, realtor.com reports that in addition to more listings coming available, October saw more homes being listed at cheaper price points.

“Buyers have been struggling for four years to find homes in their price range, while dealing with bidding wars and multiple-offer situations,” said Danielle Hale, chief economist for realtor.com. “The inventory increase will not solve the problem overnight, but it should provide some relief to those still in the market, especially if the growth we’re seeing in more affordable homes and condos holds steady.”

Not surprisingly, the larger metros drove a greater portion of the overall rise in listings. According to the realtor.com report, combined inventory in the 45 largest urban areas increased 6 percent in October compared with the previous year. Of those markets, 24 saw year-over-year growth in listings. Markets with the most dramatic gains were San Jose, CA.; Seattle, San Francisco, San Diego, and Nashville, TN. In those metros, inventory of homes for sale jumped 32 percent or more.

Prices Remain on Upward Path

Unfortunately for many buyers, prices have yet to come down overall. The median listing price in the U.S. was $295,000 in October, a 7 percent increase from the year before. The good news however, is that is still an improvement over the 10 percent increase seen from October 2016 to October 2017. More good news — new listings came onto the market at prices averaging 8 percent cheaper than homes that were already on the market.

Hale notes that affordability remains an issue, and rising mortgage rates may be adding to the dilemma so many would-be buyers are facing.

New Listings 10% Smaller on Average

First time buyers may be especially challenged, as they do not have the luxury of selling a home to help fund a down payment. Still, there appears to be light at the end of the tunnel, so to speak, with more lower-priced homes coming into the market every day. More modest homes are also on the rise, according to the realtor.com report. New listings were 10 percent smaller on average in October, probably due to condominiums and townhomes experiencing the fastest inventory growth. This is a good sign for first time buyers, younger buyers, single buyers and those looking to downsize.

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