Homebuyers have depleted the modest gains the US housing inventory managed to build up these past few months.
Around 102,112 homes were snapped up from the national housing inventory during this year’s home shopping season, according to the September Zillow Real Estate Market Report.
The supply of homes for sale dropped 6.4% year over year in September, falling to its lowest level since at least 2013. This reversed the inventory gains between September 2018 and February 2019.
Additionally, a drop in the number of new monthly listings contributed to the current shortage. New monthly listings were 8.4% and 10.6% lower than in April and May 2018, according to the report.
However, a spike in existing home sales and new housing starts, as well as a boost in builder confidence, offset the inventory shortage.
"Housing appears to have renewed its place as a bright spot contributing to continued US economic growth,” said Skylar Olsen, director of economic research at Zillow. “The return of accelerating quarterly price growth, rising sales numbers, and increasing homebuilder confidence and activity all point to closing out 2019 on a healthy note, despite greater volatility over the course of this year."
Inventory growth among homes for first-time and low-income buyers rose 6.7% month over month in October but fell 10.3% year over year in September. Zillow said entry-level homes are also less likely to get more affordable in the coming months. Only 12.7% of bottom-tier homes had a price cut in September, compared to 15.7% of middle-tier homes and 17.3% of top-tier homes.
Lastly, the pace of annual home-price growth slowed for the ninth straight month, down to 4.8% annually. However, the annualized rate of quarterly growth picked up speed to 4.3%.