National Supply of Homes For Sale Rises to 3.3 months in June 2019

By Shu Chen Housing Affordability, Real Estate

With home prices reaching new highs in the longest economic expansion in U.S. history[1], affordability has become a concern and is pushing potential homebuyers away. This in turn has caused for-sale housing inventories to increase after hitting historical lows last year. Nationally, the number of homes for sale equated to a 3.3-month supply[2] in June 2019, up from a 2.8-month supply in June 2018.

High-Priced Homes Have the Most Supply

Figure 1 breaks out the months of supply for June of each year into four price tiers: low price (0-75 percent of the median list price), low-to-middle price (75-100 percent of the median list price), middle-to-moderate price (100-125 percent of the median list price) and high price (125 percent or more of the median list price). Supply is lowest for the low-to-middle and middle-to-moderate price tiers and highest for the high and low-price tiers.

Here’s how each price tier’s months of supply in June 2019 compares with history:

  • The low-price tier had a 3.5-month supply in June, up from 3 months in June 2018 and about one-third of its peak in January 2008.
  • The low- to middle-price tier had a 2.6-month supply in June, up from 2.2 months in June 2018. The June 2019 supply was about one-fifth of its January 2009 peak.
  • The middle- to moderate-price tier had a 2.8-month supply in June, up from 2.3 months in June 2018. The June 2019 supply was about one-fifth of its January 2009 peak.
  • The high-price tier had a 3.9-month supply in June, up 0.6 months from June 2018. The June 2019 supply was about one-quarter of its January 2009 peak.

Homes Don't Spend on the Market

With demand strong and supply tight, many homes didn’t spend long on the market in 2019. Figure 2 shows that over the past two years the share of homes selling within 30 days of the initial list date[3] has been at the highest level since 2000. In June 2019, the share selling within 30 days was 26.2%, higher than the pre-crisis peak of 20.8% in August 2004 and double the level during the January 2008 trough. Figure 3 shows the share of the for-sale inventory that was on the market for more than 180 days. In June 2019, that share was 20.3%, which was about the same with the 2018 average of 19.2% but only about half of the March 2009 peak of 36.1%.

State Inventory at Low Levels

Figure 4 shows the months of supply in the U.S. (based on data for 51 metropolitan areas) and selected metropolitan areas in June 2019 and June 2018. Nationwide, the inventory increased 7.5% year-over-year in June, with the supply at 3.3 months in June 2019 compared with 2.8 months in June 2018. Out of 20 metropolitan areas, 18 showed increases in months’ supply this June compared with a year earlier. Miami had the largest increase in supply, gaining 2.1 months, from 7.7 in June 2018 to 9.8 in June 2019.

Supply Is Up in Most Large Metros

[1] Special Report: The Role of Housing in the Longest Economic Expansion https://www.corelogic.com/downloadable-docs/corelogic_2019_specialreport.pdf

[2] The months of supply, or months of inventory, is calculated as the ratio of the for-sale inventory at the end of the month to the number of homes sold during the same month, and represents the number of months it would take to sell the inventory at that month’s sales pace. The U.S. statistics are based on data for 51 metropolitan areas. To determine the price tier, the median list price was the median of homes listed in the 51 metropolitan areas for the given month.

[3] Figures 2 and 3 show a rolling 12-month average.

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