Housing inventory sees largest annual jump in 10 years
After a half-year of decreased sales, the supply of homes grew for the fourth straight month in January, setting up a potentially big spring for buying.
Winter's the slowest part of the home buying cycle and January's sales dropped 11% year-over-year after tanking 12.1% in December, according to a Remax report. Overall, the inventory grew 6.4% year-over-year in January, the largest annual jump in the report's 10-year history. The gradual gains in supply help tip the scales of power, but a buyer's market still sits off in the distance.
"The winter chill extended to the housing market in January, as home sales remained cool," Remax CEO Adam Contos said in a press release. "The good news is that inventory levels in January continued to rise on a year-over-year basis, providing incremental improvement in what's been a multiyear shortage of for-sale homes. This is a positive for homebuyers, as the market continues to swing their way."
January's inventory reached a 3.9-month supply, up from a 3.4-month supply a year earlier. A supply of six months defines market equilibrium.
January 2019's median home price of $234,000 marked a report record for the month, rising 4.6% over the year prior. However, the rate of growth slowed as the median price jumped 6.7% in January 2018 from January 2017. Additionally, it's down 2.5% month-over-month from December 2018.
"Underlying demand remains solid overall, as evidenced by widespread price increases. So the housing market, while not markedly busy in January, remains relatively healthy. Furthermore, with interest rates stabilizing and home-price increases slowing, the spring selling season shapes up to be as interesting as any we have seen in years," said Contos.