Watching inventory helps understand the housing market:
US housing for sale inventory, on a national basis, was up +2.8% year-over-year (YoY) in October, this was the third consecutive YoY increase, following over three years of YoY declines, explained Calculated Risk Tuesday.
Elsewhere, Zillow data shows the number of available homes increased by +3% year-over-year, making it easier for someone to buy a home. Over the last three years, buyers in the most popular markets have been frustrated by a lack of choice and by having to outbid other buyers when they were able to find an acceptable home.
Inventory is a key for the housing market. Watch inventory for the impact of the new tax law and higher mortgage rates on housing. Also note that inventory in Seattle was up +211% year-over-year in November, and Denver up +47% YoY (not graphed)! Read more at https://www.calculatedriskblog.com/2018/12/housing-inventory-tracking.html#V7R7dWU54MHyhbZO.99
The inventory of entry-level homes remains fairly low making it more difficult for buyers to find the home they want. Now that mortgage rates are rising, some potential buyers in that market segment may be less inclined to become homeowners, especially since Zillow reports rents have flattened or even fallen in some markets.
Meanwhile, the build-up in home inventory has not yet reduced home values. Zillow reports home value appreciation held steady in October at 7.7 percent, with the US median home value at US$221,500.