Home Prices See Big Gains As Supply Dwindles
October 27, 2020
Home prices have seen a dramatic increase as demand surges and supply falters. Prices were up 5.7% annually in August, according to the S&P CoreLogic Case-Shiller National Home Price Index. This is the biggest increase in more than two years.
Part of the price increase is due to the historically low inventory of homes for sale. At the end of September, there were just 1.47 million homes for sale, an annual decrease of 19.2%. This amounts to just a 2.7 month supply, the lowest on record since the metric started being tracked in 1982.
Supply is weakest at the lowest end of the market, limiting availability for first-time buyers. The share of sales to first-time buyers fell to 31% in September, down from 31% in August.