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As I noted last year, Inventory will Tell the Tale about the housing market. And it is pretty clear that Housing Inventory Has Bottomed.

As the housing market slows, we need to watch inventory very closely. This will give us a hint on what will happen with house prices (I’ll discuss the possible paths for house prices tomorrow).

And not just the monthly existing home sales report from the National Association of Realtors (NAR) and the monthly new home sales report from the Census Bureau. I also track inventory and sales for 35+ local markets each month. And I post weekly inventory data from Altos Research on calculatedriskblog.com.

Realtor.com Weekly Inventory Data

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released this morning from Chief Economist Danielle Hale: Weekly Housing Trends View — Data Week Ending May 7, 2022. Note: They have data on list prices, new listings and more, but this focus is on inventory.

Active inventory grew for the first time since 2019. While the size of the improvement rounded to 0%, this week’s data [marks] the first time that inventory figures weren’t lower than the previous year since June 2019. Our April Housing Trends Report showed that the active listings count remained 60 percent below its level right at the onset of the pandemic. This means that for every 5 homes available for sale in the earlier period, today there are just 2. In other words, homes for sale are still limited. However, the switch to growth after nearly 3 years of decline is a step in the right direction, even though inventory continues to lag pre-pandemic normal.
Here is a graph of the year-over-year change in inventory according to realtor.com. Note: I corrected a sign error in the data for Feb 26, 2022.

Note the rapid increase in the YoY change, from down 30% at the beginning of the year, to unchanged YoY now. It will be important to watch if that trend continues.

The previous week, inventory was down 3.4% YoY according to Realtor.com. That is close to the 1.6% decline that Altos reported for the similar period. I expect Altos to report a year-over-year increase in inventory on Monday.

Housing Inventory Milestones to Watch

The seasonal bottom. ✅
Inventory up year-over-year✅
Inventory up compared to two years ago
Inventory back to median for last decade
The bottom line is inventory is key, and inventory is now increasing year-over-year (but still very low). I’ll discuss the possible paths for house prices tomorrow.

https://calculatedrisk.substack.com/p/realtorcom-reports-weekly-inventory-755?s=r&source=patrick.net