A new study conducted by Redfin, the Seattle-based real estate agency, found that the number of affordable home listings across the United States has decreased considerably in 2014. The report is in line with the rising home prices.
Redfin's research found that the number of homes costing $375,000 or lesser fell by 28.2 percent in 2014 as compared to the figures of 2011. Also, the number of homes in the high-price range went up by 16.4 percent this year.
To arrive at the conclusion, Redfin researchers dug up for sale home listings of 2011 in the middle-price range of $130,000 to $375,000 and compared them to the number of homes for sale in 2014 in the same price range.
They found that homes priced at $130,000 or lesser (the most affordable segment) has gone down by 50 percent from 2011. They also found that the middle level, or the average price of a middle-level home, has gone up considerably since 2011.
In markets like Las Vegas, Sacramento, San Francisco and San Jose, the number of homes available for sale in the middle level price range declined more than others.
As supply of low-cost homes is getting thinner, buyers are reportedly adjusting their home-buying preferences and house hunts accordingly.
The Redfin research found that a large number of buyers are now expanding their search to a new area or giving their home hunt a break because they want to make sure that they are getting the best deal.
"The issue seems to be that a lot of what's on the market is overpriced, and buyers are feeling uncertain about whether it's a good time to buy. Some of my clients are getting homes under contract but continuing to tour more properties, to be absolutely certain they've found the best deal," Marcus Fleming, a Redfin real estate agent and market manager in Phoenix, was quoted in the report.
The researchers say that the increase in new home construction and building permits should bump up supply of affordable homes providing some relief to buyers. Also, the improving economy and jobs report should also encourage more home-buying activity among the Americans.
Home prices in the U.S. went up 1.2 percent in July on a month-on-month basis and 7.4 percent on a year-over-year basis, according to the latest CoreLogic data. But, experts forecast prices to gain only by 3.4 percent in the coming twelve months.
Take a look at the current most and least affordable housing markets in the country here.
