Earlier today we wrote at length about the decline in US housing inventory being, in effect, the next crisis for the housing market.
With inventories down and supply tight — as of February the outstanding stock of existing homes would only last 4.4 months at the current selling rate — the lowest price points in the market are being disproportionately affected, preventing millennials from buying homes and pushing up rent inflation.
In commentary published Monday, Ralph McLaughlin, chief economist at Trulia, noted that inventory for both starter homes and trade-up homes — the two lowest price brackets in the housing market — is down about 40% in the last four years.
Overall, the total number of homes sitting on the market is down to around 860,000, down from 1.4 million 2012.
In short, the US housing market is facing a severe lack of supply that will either be resolved by higher prices (and more inflation) or more building.
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