Photo: David Lewallen/Flickr
US home price growth slowed to its lowest level in nearly two years in July, according to a report released yesterday by the listing site Redfin.
While sales rebounded from last year, buyers had fewer homes to choose from, as inventory continued to tighten.
“The good news is that the year-over-year declines in inventory have been moderating and inventory is actually growing in some hot markets, including Portland, Seattle and the Bay Area,” Redfin spokesperson Alina Ptaszynski tells Livabl.
Nationally, housing inventory has fallen for 34 consecutive months. The number of homes for sale in July was down 5.4 percent year-over-year.
Last month’s decline in inventory marks the third month of annual supply declines of roughly 5 percent, following 19 months of inventory declines of over 7 percent.
“This prolonged shortage of homes has had a big impact on first-time buyers as they must compete for a limited number of homes, particularly affordable starter homes,” says Ptaszynski.
Yet despite a national decrease in inventory, several housing markets recorded double-digit increases in inventory in July.
For the second consecutive month, the San Jose, California, (28 percent) Seattle, Washington, (27 percent) and Portland, Oregon, (21.8 percent) markets recorded huge annual inventory increases.
Sales were down year-over-year in all three markets , while home prices rose year-over-year, but at a slower rate.
“After 75 straight months of price increases in these markets that far outpaced wage growth, homebuyers are now becoming selective about which homes to buy, and at what price,” Redfin CEO Glenn Kelman tells Livabl.
The homes that did sell still sold quickly — an average of just 13 days compared to 35 days nationally — but buyers were significantly more likely to reject homes that were less desirable or aggressively priced by the seller, says Kelman.
Meantime, national home prices grew by 5.3 percent annually to a median of $307,400. While prices were up, the growth rate has been slowing for the past five months and has not not been this low since September 2016.
“White it is still a sellers’ market, we are seeing signs that the market may be returning to a healthier, more balanced market,” says Ptaszynski.
As the summer buying season comes to a close, buyers should expect more of the same come fall.
“If current trends prevail, nationally we can expect price growth to continue to moderate as more inventory becomes available,” says Ptaszynski.
Click here to read the entire report.