Housing inventory typically declines in November—but this year it rose

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The fact that there isn’t an excessive amount of existing inventory on the national market is the primary reason spiked mortgage rates and strained affordability haven't translated into a greater pullback in national house prices.

On Thursday, Realtor.com published its inventory reading for November. Let’s take a closer look at the data.

In November 2023, there were 754,846 active listings* on Realtor.com. That’s +1% above November 2022 (748,344 active listings), and +48% above the height of the Pandemic Housing Boom in November 2021 (509,138 active listings) when many homes were selling so fast they weren’t even being registered as inventory.

But it’s still well below pre-pandemic levels: Active listings in November 2023 were -34% below November 2019 levels when there were 1,141,299 U.S. homes for sale.

November inventory total, by year, according to Realtor.com:

November 2017: 1,226,200

November 2018: 1,271,051

November 2019: 1,141,299

November 2020: 680,742

November 2021: 509,138

November 2022: 748,344

November 2023: 754,846

How inventory has shifted between October and November (month-over-month), by year, according to Realtor.com:

November 2017: -59,013

November 2018: -31,628

November 2019: -65,035

November 2020: -50,244

November 2021: -53,466 

November 2022: -2,569

November 2023: +17,366

Big picture: The increase in active listings in November 2023 is a clear sign that the U.S. housing market underwent a more pronounced cooling than usual for November, undoubtedly influenced by mortgage rates exceeding 8% during the seasonally soft window. However, national inventory levels still remain below pre-pandemic levels, suggesting more of a balancing housing market than a crashing one.

The increase in active listings during November can be attributed to mortgage rates spiking higher this fall, which priced out more potential buyers, resulting in homes lingering on the market for longer periods.

How do we know that? Because active listings* (i.e. every home for sale in a given month) rose despite the fact that new listings** (i.e. homes coming on the market in a given month) fell month-over-month in November (see chart above).

On Tuesday, we learned that U.S. home prices, as measured by the Case-Shiller National Home Price Index, rose +0.3% in September, which is right in line with a normal September.

U.S. home prices, as measured by Case-Shiller, are up +3.9% on a year-over-year basis. U.S. home prices are +1.3% above last year’s peak (June 2022), and up +6.6% since the bottom in January. National home prices are up +45.1% since March 2020.

Month-over-month U.S. home price growth, as measured by Case-Shiller, since 1975 👇

* Active listings (i.e. inventory) = “The count of active listings within the specified geography during the specified month. The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month” according to Realtor.com.

** New listings = “The count of new listings added to the market within the specified geography. The new listing count represents a typical week’s worth of new listings in a given month. The new listing count can be multiplied by the number of weeks in a month to produce a monthly new listing count” according to Realtor.com.

Tomorrow, ResiClub Pro members will get access to the updated Lance Lambert Inventory Tracker, which will provide inventory metrics at the metro and county levels.