Inventory will Tell the Tale

Way back in November 2021, I wrote Inventory will Tell the Tale and recounted how changes in housing inventory had helped me forecast the housing market at several key points. Inventory growth has slowed recently, and this could be important for the housing market and house prices!

I watch inventory closely. 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 use weekly data from Altos Research and from Realtor.com.

And I track inventory and sales for 40+ local markets each month.

Here is the most recent data from Altos Research. As of June 19th inventory was only up 0.2% from the same week in 2025, and was still down 13.0% from 2019.

The NAR reported inventory was up only 0.6% year-over-year (blue) in May compared to May 2025. (Red is months-of-supply).

Of course, another way to look at inventory is months-of-supply. The following graph is based on data from the NAR and uses seasonally adjusted sales, and NSA inventory.

Months-of-supply was at 4.5 months in May compared to 4.3 months in May 2019. National months-of-supply is just below last year but above pre-pandemic levels.

Prices might decline nationally if months-of-supply exceeds 5 months this summer, but with the slowdown in inventory growth, year-over-year national price declines now seem less likely this year.

As always, I believe one thing is certain: inventory will tell the tale!