With 15 consecutive months of year-over-year increases, it seemed that home inventory levels were on a long-term positive trend. However, those 15 months have now been followed by five consecutive months of declines. The latest data from the California Association of Realtors shows that active home listings fell again in November, dropping 22.5 percent from last year. This is the third consecutive double-digit drop and the largest single-month decrease since April 2013.
The recent drops in active listings coupled with marginal increases in home sales have led to a tightening of inventory levels. The nationwide Unsold Inventory Index, a measurement of the supply and demand in the housing market, was just 3.1 months of in November. This suggests that at the current rate of home sales, it would take that length of time to sell all the homes listed on the market. That is far below the 6 months of supply economists say is a healthy, balanced market.
The short-supply of homes on the market has led to properties being snatched up faster than before. In California, single-family homes are selling within just 25 days of being listed.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.75 percent and 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.