What is scarier than a potential home buyer not finding the perfect dream house with a spiral staircase or white picket fence? Not being able to find a home at all.
The U.S. housing market has collectively seen a home inventory decline for the fifth consecutive quarter, the longest streak since the housing market crashed in 2012. As a result of the sharp inventory decline, prices have shot up as well, according to Trulia’s inventory trend study of the 100 largest metro areas.
Comparing these to the third quarter statistics in 2015, starter homes have increased in median price by 7.5 percent. Similarly, trade-up homes saw an increase of 6.4 percent and premium homes rose 7.5 percent. This continues to affect affordability for potential home buyers across the country.
As seen, homebuyers looking at starter homes have to dedicate 38.5 percent of their monthly income for purchase, which is a 1.7-point increase from last year. Trade-up homebuyers typically spend 25.5 percent of their monthly income on buying, a .9-point increase. And finally, those interested in premium homes spend 13.9 percent of their monthly income, which is a .6-point increase from the previous year.
Houston: A Promising Future
Despite these home inventory statistics found by Trulia, other indications suggest certain different metropolitan areas are seeing signs of relief. All those living in Cape Coral-Fort Myers rejoice! Over the past year, this metropolitan has seen a 36.7 percent increase in home inventory. As of now, there are 21 total major metropolitan areas that have actually experienced similar increases in inventory of the past year, including Houston.
The city of Houston has seen numerous changes in the housing market in recent years, making this metropolitan area a far more favorable place to live. Of the different factors, Houston’s home inventory growth continues to balance out the city’s supply and demand in the housing market, which has been a huge goal for those in the industry. At the end of Q3 in 2015, there were 23,079 available homes in Houston. This number has actually grown and as of now Houston is seeing 24,248 homes, which is a 5.1 percent increase.
Other cities are also, quite literally, gaining ground. Miami has seen a 33.1 percent surge in home inventory in the past year, and trailing close behind include Las Vegas, Fresno, and the Northpoint-Sarasota-Bradenton metro. Just in Texas, San Antonio made the list of top cities with a .4 percent home inventory increase.
Why the positive shift in Houston and other cities with comparable data? For one, according to the US Census Income and Poverty report, national real income increased over five percent in 2015. That, combined with income growth, can help break down the housing market gridlock. Houston’s housing market is hopeful as the city continues to see an increase in home inventory as well as various factors that indicate a stronger market overall.