Unpacking the Persisting Inventory Crisis Plaguing the Housing Market By Jordan Grice
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recent Black Knight, Inc. report has delved into the extent of the inventory crisis that has continued to plague the housing market. Despite recent progress in increasing the supply of homes for sale, the report suggested that those developments aren’t good enough to correct the dearth of inventory. In a recently released white paper titled, “Trending Toward Zero: Black Knight Home Price Trends Data Shows Single-Family Home Inventories Remain Near Historic Low,” Collateral Analytics, a division of Black Knight, explored property-level data from the top 100 metros in the U.S. to see just how tight inventories have become nationwide. The paper highlighted factors contributing to historically low inventory levels, which have become a key driver in the growing housing affordability crisis facing buyers nationwide. 48 July 2022 RISMedia’s REAL ESTATE
That was evident in Black Knight’s latest Mortgage Monitor Report, which found that housing affordability hit its worst level in 16 years, despite a deceleration in price appreciation for single-family homes. The gradual decline in the remaining monthly inventory serves as the primary driver for the state of the market. The supply of homes for sale has steadily declined since the late 2000s. That drop was exacerbated by the pandemic and buzzing market activity that followed. According to the report, the monthly
supply was reduced to around two months nationally, while some markets are trending toward zero. The report attributed the current state of the market and the lull in the inventory of homes for sale to a mix of factors, including persisting supply chain issues that have plagued home builders. With inventories so low, selling a home in today’s market has become relatively easy given the current state of inventory nationwide. However, the report indicated that some would-be sellers remained sidelined rather than risk selling a home and being stuck without a home to move into. Key Findings • 96% of the markets analyzed were considered “hot” or “strong” in terms of overall market strength. • Home prices in April were up more than 10% year-over-year in all of the nation’s 100 markets. • Existing single-family home inventory has hovered around two months’ worth of supply nationwide since 2021. • Monthly inventory levels have gradually declined since 2012—
