Slim loot for buyers amid near-record low homes for sale

LOS ANGELES — Americans eager to buy a house this spring, beware: there is little for sale.

The number of U.S. homes on the market is at near-historic lows, which could lower potential buyers’ prospects of finding a house or apartment and fuel competition for the most affordable properties, economists say.

At the end of February, just as the spring home-buying season kicked off, there were about 980,000 homes on the market nationwide, according to the National Association of Realtors.

That is an increase of 15.3% compared to February last year, when the number of homes for sale fell to an all-time low.

The number of houses for sale in February translates into a supply for 2.6 months at the current sales rate, according to NAR. In a more balanced market between buyers and sellers, there is a supply of 5 to 6 months.

While homebuyers will now have more homes to choose from than last spring, the low supply and sharply higher mortgage rates paved the way for a higher overall homeownership price tag.

“Buyers are facing a tough market, both in terms of inventory availability and how that correlates with affordability,” said Hannah Jones, an economic data analyst at Realtor.com.

An important reason that there are more homes for sale than a year ago: it takes on average almost twice as long for homes to sell. New listings in February were down about 16% from a year earlier, according to data from Realtor.com.

Homebuyers have struggled for much of the past decade with a shrinking pool of homes for sale, due in part to new home underbuilds since the mid-2000s housing crash and years of ultra-low mortgage rates that make homeowners less likely to to sell after years of rising house prices.

“Homeowners are not giving up their current homes and low monthly payments to enter a tight, expensive market,” said Skylar Olsen, Zillow’s chief economist.

The last year the monthly number of homes on the market averaged more than 2 million was 2015, according to NAR data. That has steadily declined, reaching 995,833 last year.

Despite the meager housing inventory, pre-occupied home sales in the US rose 14.5% last month as homebuyers benefited from a modest decline in mortgage rates. Turnover fell by 22.6% compared to a year earlier, when mortgage interest rates were on average more than 2 percentage points lower.