Prospective home buyers had 9.4 percent fewer homes to choose from in May compared to the year before, according to Zillow.
Columbus, San Jose, and Minneapolis had the largest inventory declines last month, all with year-over-year drops of 28 percent or higher. In Seattle, Detroit, and Tampa, a lack of inventory has led to home value growth of 10 percent or more as of last month.
Inventory did rise in several metros, including Las Vegas, Kansas City, and three of the largest cities in Texas (Austin, Houston, and Dallas). Inventory was up 23.9 percent in Austin as of May.
The shortage of available homes is driven by several factors, including high demand, the lack of new construction, and declining mobility rates, all of which may be generating a self-perpetuating cycle.
Limited inventory has been an increasing issue since the end of the Great Recession. With fewer homes for sale, competition becomes so fierce that people snatch them up quickly, and homes spend less and less time on the market. In April, homes stayed on the market for just 77 days, the fewest Zillow has ever reported and down from 82 days in May 2016 and 86 days in May 2015.