As Inventory Drops, Home Buying Becomes More Difficult

A recent article from Fortune says, “In April 2021, housing inventory on Zillow bottomed out at 960,000 listings. By September, it had risen to 1.1 million.”

But things have changed for the worse as inventory levels in 2022 are now falling – definitely bad news for homebuyers.

On Friday, Zillow reported that U.S. inventory sank to 729,000 home listings in February. That’s down 25% from February 2021, and a decrease of 48% since February 2020. It also marks the fifth consecutive month of declining inventory.

There’s another reason inventory is shrinking again: Spiking mortgage rates. Back in December, the average 30-year fixed mortgage rate was at 3.11%. As of Friday, that rate has spiked to 3.85%. In theory, higher rates should cool the market over time.

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