Realtor.com Reports Weekly Inventory Up 25% Year-over-year
Inventory growth is accelerating
As I noted earlier, Inventory will Tell the Tale about the housing market. And housing inventory is increasing quickly.
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.
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.
Here are the inventory milestones I’m watching for:
The seasonal bottom. ✅
Inventory up year-over-year✅
Inventory up compared to same week two years ago (will happen in Q3)
Inventory up compared to same week in 2019.
Realtor.com Weekly Inventory Data
Realtor.com has monthly and weekly data on the existing homes. Here is their most recent weekly report released today: Weekly Housing Trends View — Data Week Ending June 25, 2022. They have data on list prices, new listing and more, but this focus is on inventory.
• Active inventory continued to grow, rising 25% above one year ago. With more homeowners deciding to sell just as higher mortgage rates and prices are taking a big bite out of homebuyer purchasing power, the number of homes actively available to shoppers has made a quick about-face. Inventory was roughly even with last year’s levels at the beginning of May and the gains have mounted each week with this most recent week seeing five homes on the market for every four that a buyer at this time last year would have seen. Still, our June Housing Trends Report showed that the active listings count remained less than half its June 2019 level and just shy of two-thirds its June 2020 mark. Put another way, today’s shoppers have more options, but the market needs even more before the selection is on par with the pre-pandemic or even early-pandemic housing market.
Here is a graph of the year-over-year change in inventory according to realtor.com.
The previous week, inventory was up 20.7% YoY according to Realtor.com. That is close to the 23.6% that Altos reported for the similar period. Based on recent trends, I expect Altos to report close to a 30% year-over-year increase in inventory on Monday.
And here is a monthly graph from Realtor.com released today that shows their estimate of active inventory over the last six years. Note that inventory was declining rapidly for most of 2020, and it is very likely that inventory will be up compared to 2020 in Q3. (June 2022 is for mid-June, and inventory has increased further over the last two weeks).
Comparing Realtor.com Monthly data to the NAR
Here is a graph comparing the year-over-year change in the Realtor.com monthly data to the inventory data from the National Association of Realtors (NAR).
It appears the NAR includes some pending sales in their inventory data, and that accounts for the divergence in the year-over-year change over the last 2 years.
Housing economist Tom Lawler noted this in early 2021:
"As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for many of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months."
The divergence between the NAR and other measures will probably disappear as the housing market slows.
The bottom line is inventory is still low but increasing quickly.
CalculatedRisk Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.