The nation’s for-sale inventory fell to a 3.9-month supply at the end of October, according to the National Association of Realtors, meaning that at the current sales pace it would take approximately four months to sell every one of the 1.77 million homes available for sale.
Inventory has been falling annually for five straight months, below the six-month threshold that is considered a sign of a healthy market. Issues are worst on the low end; the supply of homes priced between $100,000 and $250,000 has fallen 6% annually.
As supply falls, home prices are heating up; as of the end of October, the national median home price has risen 6% annually.
“A lack of entry-level homes means newcomers to the market can have a hard time getting a foothold,” said Matthew Speakman, an economist with Zillow. “They and other budget-conscious shoppers shy away from prices in many of the country’s most populous areas, creating a nation of would-be home buyers who show preternatural patience in waiting for the right home to come along.”
