The Longest Housing Inventory Decline in History Comes to an End

SANTA CLARA, Calif., Oct. 31, 2018 -- National housing inventory grew by 2 percent, or 25,000 listings, in October after four years of severe inventory declines, according to realtor.com®'s October housing report released today. New listings that hit the market in October were 8 percent cheaper than existing homes for-sale, which may be an early indicator that more affordable inventory is on the way for first-time home buyers.

In October, the U.S. median listing price remained at $295,000, a 7 percent increase year-over-year, but lower than last year's 10 percent increase. Homes continued to sell at a relatively rapid pace of 68 days, five days faster than last year. New listings grew 4 percent in October and were on average 8 percent or $25,000 cheaper than existing inventory, and on average 10 percent, or 190 square-feet, smaller. The fastest inventory growth was found in condominiums and townhomes, which are now up 7 percent year-over-year, compared to single family homes which are up 1 percent.

"Buyers have been struggling for four years to find homes in their price range, while dealing with bidding wars and multiple offer situations," said Danielle Hale, chief economist for realtor.com®. "The inventory increase will not solve the problem overnight, but it should provide some relief to those still in the market, especially if the growth we're seeing in more affordable homes and condos holds steady. However, affordability is still an issue with increasing mortgage rates and prices keeping many would-be buyers on the sidelines."

For the first time since 2014, the inventory recovery is spreading and the majority of large markets are seeing more listings than last year. In October, 26 of the 45 largest markets in the U.S. saw year-over-year inventory increases, up from 22 markets last month. The five markets that saw the largest inventory jumps were San Jose, Calif.; Seattle; San Francisco; San Diego; and Nashville, Tenn. all of which posted increases of 32 percent or more. Combined inventory in the 45 largest markets increased 6 percent year-over-year on average, higher than the national rate of 2 percent, indicating greater growth in inventory in urban sectors.

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