If you’re a buyer having trouble finding a home, you’re not alone. According to a new Trulia report released today, the U.S. home inventory decreased 10.5 percent this quarter compared to the same period last year. That’s the largest drop in inventory since the second quarter of 2013.
Take starter homes, a market that’s been challenged by supply disparities for years. The number of available properties in this price range nationwide, which has a median price of $178,034, has dropped year-over-year, from roughly 293,000 units at the close of 2016 to 237,000 at the end of 2017.
As inventory tumbles for homes at all price levels, especially premium units in tech hubs like San Jose and San Francisco, the overall balance between affordable and premium homes is increasingly favoring high-end property. The share of premium homes as a percentage of the total available homes rose from 51 to 53 percent in the last year.
Homes at all levels were “the most unaffordable on record,” according to Trulia data. The company’s research suggests that prospective homebuyers will have to pay 39.8 percent of their monthly income for starter homes, 25.5 percent of their monthly income for trade-up homes (median list price of $302,893) and 14 percent for premium homes (median list price of $631,358).
The intertwined drop in inventory and rise in prices is making homeownership increasingly difficult. “If this trend persists,” the report notes, “the market will become more and more saturated with homes that are unaffordable to even the top income brackets.”
Trulia’s year-end survey hints at some reasons for optimism, despite shrinking inventory: one in three Americans think next year will be better for selling a home than 2017, and 16 percent plan to sell their home in the next two years. Many homeowners will have to put their properties on the market to push up those dwindling inventory figures.