There were fewer homes for sale in the United States in June than there were a year ago, increasing competition for potential buyers, the latest research shows.
Most of these declines were among the lowest valued homes sought by first time homebuyers, according to the report from real estate firm Zillow.
In the lowest priced third of homes for sale, the number of homes on the market fell year on year in 28 of the nation’s 35 largest metro areas. By comparison, among the highest priced homes, inventory fell year on year in only 10 metro areas.
The total number of homes listed for sale on Zillow in June was down 6.5% year on year but was up 2.1% on a monthly basis. Large metros where inventory has increased the most annually include Austin, up 30.3%, Atlanta up 22.4% and Washington DC up 18.9%.
‘Historically low mortgage rates continue to keep overall ownership affordability very good by historical standards, making it a great time to buy a home, especially with rent becoming increasingly unaffordable,’ said Zillow chief economist Stan Humphries.
‘Finding a house is the last hurdle for many buyers who have saved a down payment and gotten pre-approved for a mortgage. But low inventory levels like those we’re seeing across the country can bring the home buying process to a screeching halt. In many markets, there just isn’t a lot to choose from in terms of homes on the market,’ he added.
Overall, home values in the United States rose 3.3% from June 2014, and 0.3% from May to a Zillow Home Value Index of $180,100. As home values continue to rise, buyers are faced with more challenges in a tighter market, especially in hot markets like Denver, which saw the highest home value appreciation from last year, surpassing even San Jose and San Francisco.
Rents have also continued to rise in the second quarter, up 4.3% from this time last year to a Zillow Rent Index of $1,369 with annual growth led by San Francisco with a rise of 14.5% followed by Denver up 13% and San Jose up 12.5%.
Metros that are seeing strong appreciation in rents, as well as home values, are experiencing healthy increases in demand with often thriving job markets and sometimes tight inventory supply, the report also says.
Of the 863 metropolitan and micropolitan areas covered by the index, some 645 saw annual growth in rents in the second quarter and 527 metro areas saw rents increase from the first to second quarters.
Over the next year, home value growth is expected to slow even further, to 2.4% through to the second quarter of 2016, according to the Zillow Home Value Forecast.
The report explains that continued steady growth in the real estate market shows signs that the market is maintaining stability after going through the housing bubble and bust of 2007 through 2012.
This article was republished with permission from Property Wire.