When shopping for something, having more to choose from is generally a good thing. This is especially true for homes. Not only do home buyers have more options, but prices stay at a reasonable level. When there are enough homes to meet demand from interested home buyers, prices moderate.
However, over the past few years, available housing inventory has been lower than normal in most markets. At this time last year, inventory was down 9.1 percent on an annual basis, according to new data by Zillow. Because of this, home values have been increasing.
That may be starting to change, however. The number of homes for sale has now increased year-over-year for three consecutive months. Although the most recent improvement was only 0.4 percent, it’s still a good sign for home buyers. If inventory continues to gain, even small increases could lead to more favorable affordability conditions.