US sees sharp fall in homes being put up for sale in some key cities, index shows

Residential real estate inventory in the United States is down for the fourth month in row and home values are also falling, the first decline in two years.

Inventory declined year on year in 21 of the nation's 35 largest metro with Houston, San Antonio and Boston experiencing the biggest decreases in supply of for sale homes. The cities saw inventory falls of 26.6%, 23.7%, 23.4% respectively.

According to the latest figures from real estate firm Zillow, US home values in April were down 0.1% from March while homes listed for sale were down 0.4% annually.

The firm says that after rising at the end of 2013, for sale inventory has fallen for four straight months in 2014. In many metros, inventory is tightest in the lower end of the market, which represents the homes most commonly sought by first time buyers.

‘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 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,’ he added.

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 on year home values rose 5.3% in April.

For the 12 month period from April 2014 to April 2015, national home values are expected to rise another 2.2% 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 with growth of 12.6%, Las Vegas 8.7% and Seattle 8%.

National rents dipped slightly in April from March, down 0.3% to a Zillow Rent Index of $1,311. Year on year, national rents were up 2.3% in April.