Inventory remains tight nationwide, with the number of homes listed for sale on Zillow down 0.4 percent annually in April, even as home values fell modestly month-over-month, according to the April Zillow Real Estate Market Reports.
After rising at the end of 2013, for-sale inventory has fallen for four straight months to begin 2014. Inventory is down compared to last year in 21 of the nation's 35 largest metro areas covered by Zillow, with the largest inventory declines in the Houston (26.6 percent), San Antonio (23.7 percent) and Boston (23.4 percent) metro areas. More than half of metros in the U.S. currently have fewer homes for sale than at the same time last year. In many metros, inventory is tightest in the lower-end of the market, which represents the homes most commonly sought by first-time homebuyers.
"First time home buyers are ready to buy, but unfortunately, aren't able to take advantage of the spring shopping season and low mortgage rates because of the lack of homes for-sale in their price range," said Zillow Chief Economist Dr. Stan Humphries. "This shortage of inventory is driven by a couple factors, most notably by stubbornly high negative equity, particularly at the lower end of the market, which is preventing many sellers from listing their homes."
National home values in April were down 0.1 percent from March to a Zillow Home Value Index of $170,200, marking the first monthly decline in more than two years. Among the 35 largest metros covered by Zillow, home values in a dozen were down in April from March, and were flat in two more. Year-over-year, U.S. home values rose 5.3 percent in April. For the 12-month period from April 2014 to April 2015, national home values are expected to rise another 2.2 percent to approximately $173,971, according to the Zillow Home Value Forecast. Large metro areas expected to show the most appreciation over the next year include Riverside (12.6 percent), Las Vegas (8.7 percent) and Seattle (8 percent).
National rents dipped slightly in April from March, down 0.3 percent to a Zillow Rent Indexiv of $1,311. Year-over-year, national rents were up 2.3 percent in April.