Housing Stock 'Bumping Along the Bottom'

Rather than signaling significant growth, the supply of for-sale homes grew 0.4 percent annually in November 2018, following October's 2 percent and September's 0.1 percent upticks.

Prior to this run of slight increases, the national for-sale housing supply fell four years in a row, with a marked double-digit decrease in March 2018. November had 1.6 million homes for sale in the U.S., 400,000 fewer than in December 2014 prior to the run of declines, Zillow reports. In terms of price, there were double the amount of homes for sale at the top-third of the market than at the bottom third, 675,823 and 334,857, respectively.

By metro, for-sale inventory decreased in 11 out of the 35 largest U.S. metros. Kansas City, Mo. had the biggest drop, 14.9 percent, while the largest gain in for-sale supply was in San Jose, Calif., up 70.7 percent.

Sluggish inventory growth likely was influenced by a spike in mortgage rates in November, when rates hit their highest level since 2011. Higher rates can keep potential sellers at home, not wanting to trade into higher-rate mortgages. Rising rates also give some buyers pause, because they increase monthly mortgage payments.

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