A recent analysis by Realtor.com indicates that a shift in the housing market across the country, lasting into 2020, could make it even tougher for home buyers. Late in 2018 and earlier in 2019, inventory, which refers to the number of homes for sale, was rising and giving buyers more options. But the pace of growth has slowed, and Realtor.com anticipates that inventory could decline for the first time this year in October.
The number of listings rose 6.4 percent in January 2019, compared with the number of homes for sale in January 2018, but that rate of increase has slowed incrementally each month this year. In June, the number of listings rose 2.8 percent during the past 12 months.
If this trend continues, overall inventory could reach near record lows by early 2020, Danielle Hale, chief economist for Realtor.com, said in a statement.
While some of the low inventory is attributed to homes being purchased quickly by buyers, there are also fewer new listings coming on the market. In June, the number of newly listed homes — which is different from inventory that includes homes that have been on the market for a month or longer — declined by 2.3 percent, compared with June 2018.
Hale speculates that among the reasons people are not putting their homes on the market are: the preference among baby boomers to age in place rather than move; reduced consumer confidence in the economy; and “rate-lock,” which refers to the fact that many homeowners purchased a home or refinanced with a mortgage rate below today’s rates. These homeowners are less inclined to move because they would be likely to pay a higher mortgage rate.
In the Washington area, new listings over a 12-month period declined by 7.0 percent in June, and overall inventory dropped 13.3 percent during the same period, according to Bright MLS.
In June, 8,504 homes were listed for sale, the lowest level since 2013, according to Bright. Inventory levels have declined for five consecutive months in the D.C. region.