Dive Brief:
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The supply of expensive homes is rising faster than the inventory of affordable and mid-priced properties, according to the October Zillow Real Estate Market Reports.
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Overall, the number of homes for sale increased in October. But in many markets, including Dallas, Atlanta, Phoenix, and Nashville, high-priced homes outnumbered lower-cost dwellings by double. Denver had four times as many luxury homes—priced $357,000-plus—on the market than lower-tier properties—for sale for $219,000 or less.
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Median U.S. home values were 6.4% higher in October than they were a year ago, and up 0.4% from September, according to the Zillow Home Value Index.
Dive Insight:
When more high-end homes than affordable dwellings are for sale, young, first-time homebuyers can have trouble finding and affording property. Economists have said they expect more demand for homes to come from lower-income house hunters over the next few years as the millennials marry and start families.
For some builders, that will require shifting their focus from luxury homes to entry-level product.