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Final Look at Local Housing Markets in April

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Final Look at Local Housing Markets in April

Housing Inventory Milestones to Watch

CalculatedRisk by Bill McBride
May 23, 2022
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Final Look at Local Housing Markets in April

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This is the final look at local markets in April. I’m tracking about 35 local housing markets in the US. Some of the 35 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

We are seeing a significant change in inventory, but no surge in new listings. This means the increase in inventory is due to a decrease in demand, likely because of higher mortgage rates.

The following data is important, especially active inventory. On a national basis, we saw record low inventory levels over the Winter. Last year, inventory didn’t bottom seasonally until early April.

This year inventory bottomed in February (normal seasonal timing). The next milestone will be when inventory is up year-over-year (YoY). Note: Both Realtor.com and Altos Research have reported inventory is up year-over-year in May, but this data is for April.

Housing Inventory Milestones to Watch

  1. The seasonal bottom. ✅

  2. Inventory up year-over-year (currently down 10.4% according to the NAR)

  3. Inventory up compared to two years ago (currently down 29%)

  4. Inventory back to median for last decade (currently down 44%)

So far #1 has happened, and #2 will probably happen in May. The following graph (using NAR inventory data) shows the above changes since January 2020. Even when inventory is up YoY (that will happen soon), we will still be a long way from normal levels of inventory.

I will discuss house prices vs. inventory next week after the Case-Shiller house price index is released.

Active Inventory in April

Here is a summary of active listings for these housing markets in April. Note: Inventory usually increases seasonally in April, so some month-over-month (MoM) increase is not surprising.

Inventory was up 17.6% in April MoM from March, and down 6.3% year-over-year (YoY). Almost half of these markets were up YoY.

Active inventory in these markets were down 24.0% YoY in February, and down 15.0% YoY in March, so this is a significant change from February and March. This is another step towards a more balanced market, but inventory levels are still very low.

Notes for all tables:

  1. New additions to table in BOLD.

  2. Northwest (Seattle), North Texas (Dallas) and Santa Clara (San Jose), Mid-Florida (Tampa, Orlando), Jacksonville, Source: Northeast Florida Association of REALTORS®

  3. Totals do not include Denver, Atlanta on Minneapolis (included in state totals).

This table doesn’t include California where inventory was up more than 20% YoY.

New Listings in April

And here is a table for new listings in April. For these areas, new listings were down 5.7% YoY.

Last month, new listings in these markets were down 1.1% YoY. We aren’t seeing a surge in new listings in these markets. For months-of-supply to increase sharply, we’d need to see an increase in new listings AND a decrease in sales.

Closed Sales in April

And a table of April sales. Sales in these areas were down 9.5% YoY, Not Seasonally Adjusted (NSA). The NAR reported sales NSA in April (464,000) were 9.6% below sales in April 2021 (513,000).  So, this sample of local markets is similar to the NAR report.

The table doesn’t include California where sales were down 8.5% year-over-year.

I expect we will see further increases in inventory - and further decline in sales - in May due to higher mortgage rates (more than the usual seasonal increase in inventory).

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Final Look at Local Housing Markets in April

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