What’s Behind the US House Inventory Problem?

The paucity of houses on the market remains a nagging hurdle for those Americans interested in trading up or looking to take their first step into homeownership.

With a limited number of property listings amid solid demand, sellers have little reason to reduce asking prices. From December through February, less than four months’ supply of existing houses were on the market, compared with a post-recession high of about 12 months’ worth in mid-2010, according to the National Association of Realtors. Yes, interested sellers take their homes off the market during the winter, but such a lean supply over a similar time frame has never been recorded in about two decades of data.

The pace of income growth is lagging behind that of property values. Combined with the sting of higher asking prices, affordability constraints mean rental demand will remain robust, allowing investors to maintain a solid foothold in the market, according to Lawrence Yun, NAR’s chief economist.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.