March Housing Inventory a 'Serious Mismatch'

Zillow’s market report for March 2018 found that the pool of homes for sale is shrinking, and that more than half of the available inventory is on the pricier, high end of the market.

The national total inventory of homes for sale dropped 8.6 percent last month from March 2017, and marked the 38th month of year-over-year inventory decline, per Zillow's report. First-time and lower-income buyers are expected to feel the most pain, as they are mostly seeking more affordable, entry-level homes where inventory is tightest. Additionally, that segment's supply is drying up, and prices are rising faster than any other. Entry-level inventory dropped 15.3 percent YOY in March.

There’s a serious mismatch in the U.S. housing market right now: The majority of homes available to buy aren’t the kind of homes the majority of buyers are seeking. And the limited inventory of those more sought-after homes is contributing to their more rapid appreciation. The typical, middle-of-the-road U.S. home appreciated 8 percent year-over-year in March, according to the Zillow Home Value Index, to a median value of $213,146.

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