Although the national inventory level is down 2.5 percent from one year ago, the number of homes for sale during the third quarter dropped to its slowest annual pace since 2015 and has climbed in several major markets, including San Jose (66.9 percent), Salt Lake City (45.0 percent) and Seattle (44.3 percent).
However, this does not mean that housing has become more affordable. Trulia has found that starter homebuyers would pay 25.6 percent of their income toward a mortgage (up 3.3 percent from 22.3 percent a year ago), compared to 24.4 percent for trade-up buyers (up 2.3 percent points) and 21 percent for premium buyers (up 1.3 percent).
"Homebuyers may be pleasantly surprised to see more homes on the market, as housing inventory starts to make a comeback after years of decline," said Cheryl Young, Senior Economist, Trulia. "While this is ultimately good news for frustrated buyers, years of steadily increasing prices mean that those hoping to buy a home will need to spend a bigger share of their income once they find one. Nonetheless, those buyers daunted by low inventory and high prices have reason to be cautiously optimistic as parts of the housing market begin to ease."