Growing Inventory in the Housing Market

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One of the major indicators for the stability of the housing market, the inventory, is finally showing improvement according to the latest report from Zillow. It marked an increase in May 2014 on both a monthly and an annual basis. Still, the gains are predominantly in the middle and top tier of the market.

In May 2014, the inventory in the US housing market rose by 11.8% compared to the same month of 2013. It increased by 4.3% from April to May. The annual increase, in particular, is quite significant given the continuous plunge of the inventory throughout 2012 and 2013.

The major factor behind the growing inventory is the steady increase in home values. They rose by 0.1% on a monthly basis in May. In this situation, more existing homeowners hurry to capitalize on the higher values of their properties and to take advantage of the still low mortgage rates for purchasing a bigger house. This trend is expected to remain in the coming months as mortgage rates will most certainly remain low while the housing market will be heading towards greater stability.

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The increase in the overall housing market inventory is certainly positive news, but the breakdown into components does not make the picture that optimistic. The major factor for the overall increase is the growing inventory in the middle and top tires of the market. The number of mid-priced and high-priced home for sales is marking a steady increase while there is a major plunge in the supply of the most affordable homes.

In the national market, the inventory in the bottom tire actually dropped down by 28% in May 2104 on an annual basis. Experts explain that this can lead to sharp price increases in this segment of the market and make it even more difficult for first-time home buyers, who traditionally focus on the most affordable properties, to buy a house.

While the housing market improves, its bottom segment may continue to experience difficulties.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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