US Housing Update: Shrinking Inventories

US residential housing supplies remain at multi-year low levels. The inventories of unsold homes as measured in months (time to clear the inventory) are at the lowest level since 2006.

This supply of homes is constrained by weak residential construction. This is starting to stabilize prices even in areas that have witnessed relentless house price declines, such as Southern California. What’s interesting is that we are seeing a shift from the heavily discounted or distressed sales to the more normal “move-up properties”.

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Sober Look: US housing update: shrinking inventories.