Inventory stays tight
In many places across the United States, it continues to be a seller's market, in which there are more potential homebuyers than sellers. In the hottest markets, such as Denver, sellers can expect to get multiple offers if they price their homes well.
Nationally, the inventory of homes for sale was less than 4 1/2 months toward the end of the year. "The inventory has been low, although if new homebuilding continues, that will help inventories," Ford says.
It's especially hard to find lower-price homes suitable for first-time buyers. Entry-level homes have been kept off the market because so many owners owed more on their homes than they were worth, says Rick Sharga, chief marketing officer for Ten-X, which runs Auction.com. "Disproportionately, it was that segment of the market that was hit the hardest," he says.
Lawrence Yun, chief economist for the National Association of Realtors, says, "The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion."