Lack of Inventory Squeezing First-Time Home Buyers Out of the Market By Joe Szabo, Scottsdale Real Estate Team

After rising at the end of 2013, for-sale inventory has fallen for four straight months to begin 2014. Inventory remains tight nationwide, with the number of homes listed for sale on Zillow down 0.4 percent annually in April and more than half of metros in the U.S. currently seeing a similar downward trend.

In many metros, inventory is tightest in the lower-end of the market, which represents the homes most commonly sought by first-time home buyers. According to Zillow Chief Economist Dr. Stan Humphries this shortage of inventory is driven by a couple of 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 also 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 on a monthly basis and were flat in two more.Year-over-year, U.S. home values rose 5.3 percent in April. The Zillow Home Value Forecast calls for another 2.2 percent increase in national home values by April 2015, further confirming that the market is slowing down.

For a deeper analysis from Humphries, visit Zillow Research.

Want to know which markets saw the greatest change in housing supply this past year? Check out the graphic below.