Trulia: U.S. Home Inventory Falls For Fifth Straight Quarter, But Signs Of Relief Emerge
Home Inventory Falls Again in Longest Downward Streak Since Market Bottom in 2012, While Some California and Florida Cities Show Signs of Recovery
SAN FRANCISCO, Sept. 21, 2016 /PRNewswire/ -- Trulia®, a leading destination for homebuyers and renters, today released a report that finds inventory falling for the fifth straight quarter, pushing home affordability further out of reach for more Americans. Meanwhile, some markets across the country are bucking the trend by adding inventory. In this report, we reveal the latest findings from this quarter's edition of the Trulia Inventory and Price Watch.
Nationally, housing inventory continues to shrink. This summer, the number of homes on the market dropped for the fifth straight quarter, extending a slump and dropping 6.7% over the past year. The number of starter and trade-up homes on the market nationwide has dropped by 10.7% and 9.2%, respectively. Meanwhile, premium home inventory dropped just 3.2% over the past year. The persistent and disproportional drop in starter and tradeup home inventory is pushing affordability further out of reach for homebuyers. Starter and trade-up homebuyers need to spend 1.7% and 0.9% more of their income than this time last year, whereas premium homebuyers only need to shell out 0.6% more of their income.
| 2016 Q3 National Inventory Monitor |
|||||||||
| Housing Segment |
2016 Q3 Inventory |
Change, 2015 Q3 - 2016 Q3 |
|||||||
| Median List Price |
Share |
Inventory |
% of Income |
% Change |
Percentage |
% Change in |
Additional Share Home |
||
| Starter |
$161,202 |
23.0% |
297,732 |
38.5% |
7.4% |
-0.4 pts |
-10.7% |
+1.7 pts |
|
| Trade-Up |
$280,579 |
24.0% |
306,376 |
25.5% |
6.4% |
-0.9 pts |
-9.2% |
+0.9 pts |
|
| Premium |
$579,713 |
52.9% |
650,498 |
13.9% |
7.5% |
+1.2 pts |
-3.6% |
+0.6 pts |
|
| Among the 100 largest U.S. metro areas. Share is the percent of for-sale homes that fall into each segment, which is defined separately for each metro. Median price for each segment is the stock-weighted average of the median price of each segment in each metro. Some point change estimates may be slightly different than stated values because our differing procedure occurs before rounding. |
|||||||||
Starter Homebuyers Face the Biggest Impacts of Declining Affordability
Falling inventory continues to take a toll on affordability. Starter homebuyers need to dedicate 38.5% of their monthly income to buy a starter home – a 1.7 point increase from last year. While not a hard ceiling, applying for a mortgage with a debt-to-income ratio of more than the 36% guideline used by lenders such as Fannie Mae will make the mortgage approval process more complicated for first-time buyers, especially when factoring in other debt like student loans, credit cards, and auto payments. Most trade-up and premium home buyers, on the other hand, are still in the clear. Each would need to spend just 25.5% and 13.9% of their income to buy a home, respectively.
Signs of Increased Inventory Appear on the West Coast and Florida
Although low inventory has been a persistent national trend over the past few years, relief is on the way for homebuyers in some markets. Of the 100 largest markets, 21 have experienced increases in inventory over the past year, with many showing double-digit gains. However, half of these markets are in just two states: California and Florida. When looking at markets that have shown rising inventory for at least three consecutive quarters, four markets have hit an upward streak: Bakersfield, Calif., San Francisco, Sarasota, Fla., and West Palm Beach, Fla.
| Housing Markets where Inventory is on the Rise |
|||
| U.S. Metro |
Total Inventory, |
Total Inventory, |
% Change in |
| Cape Coral-Fort Myers, FL |
4,991 |
6,825 |
36.7% |
| Miami, FL |
11,216 |
14,928 |
33.1% |
| Las Vegas, NV |
10,315 |
13,394 |
29.8% |
| Fresno, CA |
1,370 |
1,705 |
24.4% |
| North Port-Sarasota- |
5,646 |
6,967 |
23.4% |
| Oklahoma City, OK |
4,993 |
5,996 |
20.1% |
| San Francisco, CA |
1,063 |
1,269 |
19.3% |
| West Palm Beach, FL |
10,083 |
11,879 |
17.8% |
| Fort Lauderdale, FL |
8,984 |
10,417 |
15.9% |
| Bakersfield, CA |
2,134 |
2,360 |
10.6% |
| San Diego, CA |
6,304 |
6,897 |
9.4% |
| San Jose, CA |
1,809 |
1,966 |
8.7% |
| Memphis, TN |
3,898 |
4,202 |
7.8% |
| Phoenix, AZ |
19,067 |
20,383 |
6.9% |
| Winston-Salem, NC |
2,870 |
3,041 |
6.0% |
| Salt Lake City, UT |
1,689 |
1,779 |
5.3% |
| Houston, TX |
23,079 |
24,248 |
5.1% |
| Milwaukee, WI |
4,022 |
4,139 |
2.9% |
| Denver, CO |
7,225 |
7,426 |
2.8% |
| Little Rock, AR |
3,971 |
4,063 |
2.3% |
| San Antonio, TX |
7,549 |
7,580 |
0.4% |
| NOTE: Among the 100 largest U.S. metro areas. |
|||
QUOTES FROM TRULIA'S CHIEF ECONOMIST RALPH MCLAUGHLIN:
- "Nothing is permanent. Not even low inventory. With notoriously stingy markets like San Francisco, San Jose and Denver adding homes after prolonged periods of declining inventory, homebuyers in these markets are beginning to see a break in gridlock and should experience more choice in the months ahead."
- "As inventory continues to fall nationally across starter, tradeup, and premium home segments, starter homebuyers will need to dedicate a larger share of their income towards a home. The good news, however, is that incomes are on the rise."
About the Trulia Inventory and Price Watch
The Trulia Inventory and Price Watch offers buyers and sellers deeper insight into the change in supply and affordability of homes over the past year, within three different segments of the market: starter homes, trade-up homes, and premium homes. Based on the for-sale homes listed on Trulia, this report calculates housing inventory within each segment nationally and in the 100 largest U.S. metros, from July 1, 2015 to July 1, 2016. For the full report and methodology, see here.
REMAINING 2016 RELEASE SCHEDULE
| Report |
Release Date |
| Q4 (October – December) 2016 |
Tuesday, December, 13, 2016 |
About Trulia
Trulia® is a vibrant home shopping marketplace, focused on giving homebuyers, sellers, and renters the information they need to make better decisions. On mobile and the Web, Trulia provides house hunters with insights and unique information about properties, neighborhoods, and real estate agents. Additionally, Trulia offers data and information about schools, crimes, commute times, and the real estate market.
Launched in 2005, Trulia is based in San Francisco and is owned and operated by Zillow Group (NASDAQ: Z and ZG).
Trulia is a registered trademark of Trulia, LLC.
MEDIA CONTACT:
Cecilia Xia
[email protected]
415-400-7222
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SOURCE Trulia
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