You would think that with more homes on the market, buyers would have more choices. But not necessarily — if the available homes aren’t affordable.
A recent study by Redfin showed that while inventory increased between 2017 and 2018 in some of the country’s hottest housing markets, the share of homes that were affordable to those earning the local median income actually decreased.
Of the 10 markets that saw the greatest decreases, most also saw an increase in overall inventory. Two exceptions were San Jose, Calif., where the share of affordable homes decreased by 12 percentage points, and Milwaukee, where it fell by 6 percentage points.
Redfin’s calculations took into account median incomes for each location, as well as industry standards for determining the mortgage loans that buyers of various income levels could afford, and interest rates in December of 2017 and 2018.