Inventory Levels Increase in Second Quarter

Facebooktwitterredditpinterestlinkedinmailby feather

Inventory levels saw historic lows throughout the first months of 2013, and home sales were “stuck” throughout the spring due to the limited number of homes available to buy. Today, inventory levels are slowly returning to normal conditions.

As seen in the graph above, 5.5 months of inventory signals a normal market. This means that the supply of houses currently for sale would last six months if no new homes were put up for sale. In January, there were as little as 4.2 months worth of inventory, whereas current levels are approaching a healthier five month level. Because of the low mortgage rates and increased consumer confidence, the market is especially hot with many homes selling quickly and above asking price.

Distressed inventory, also known as shadow inventory, has continued to nosedive since the housing market began to recover. Distressed inventory accounts for homes in foreclosure or short sale, where homeowners are underwater on their mortgages. Since January 2012, the percentage of distressed properties has decreased from 35% to 18%, according to the National Association of REALTORS®. Many potential home buyers and investors have continued to buy up distressed property over the last 18 months, and with fewer distressed properties in the market, non-foreclosed homes for sale will continue to bring home prices up.

Return to the full Quarterly Newsletter here.

Tags: , , , , , , , , , , ,

Categories: Home Buying, Home Selling, Real Estate News

Leave a Reply

Your email address will not be published. Required fields are marked *

Rates and fees are subject to adjustments based on your credit score and the loan-to-value ratio. Rates and fees are also subject to change without notice. Other rates and loan programs are available.
All applications are subject to current underwriting guidelines and credit approval. EHL NMLS#280412

  • Heritage Title Services, Inc.
  • The Realty Alliance
  • Wisconsin Mortgage Corporation
  • Leading Real Estate Companies of the World
  • Luxury Portfolio International
  • Shorewest Financial Associates LLC
  • My Dwelling Metro Milwaukee
  • HSA Home Warranty - Because Service Matters