Nationwide, the supply of homes for sale on the market is continuing to shrink, dropping to a 3.9-month supply as of October. This is well below levels experts consider to be healthy and the continuation of a long-term trend that has led to soaring home prices. The National Association of Realtors reports that after seeing a slight resurgence earlier this year, inventory levels have declined for five consecutive months.
The 3.9 months of available inventory is a rate established as the length of time it would take for all homes on the market to be purchased at the current sales pace. Anything less than a 6-month supply is generally understood to be an unhealthy balance between buyers and sellers.
Demand for housing has climbed as declines in mortgage rates make borrowing more affordable. The shortage of homes for sale is at its worst in the low-end of the housing market. Homes priced between $100,000 and $250,000 have seen a 6 percent drop in inventory since last year.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 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.