What's happening to housing inventory right now, as told by 3 charts

This weekend, the Lance Lambert Inventory Tracker will be updated for ResiClub PRO members. It’ll include ResiClub’s January inventory analysis for metros and counties, and it will be sent out alongside several interactive ResiClub maps.

If inventory begins to rise quickly as buyers pull back, and listings pile up, in theory, it signals a weakening market. Conversely, if inventory begins to fall quickly as homes sell faster, in theory, it can signal a strengthening housing market.

By the time the U.S. housing market was in full-blown crash mode in 2008, active housing inventory for sale had climbed to close to 4 million. But we are nowhere close to that right now. Last month, that number was 665,569 homes for sale.

The fact that there isn’t an excessive amount of existing inventory on the national market is a core reason why spiked mortgage rates and strained affordability haven't translated into more regional home price corrections.

Realtor.com just published its inventory reading for January. Let's take a closer look at the national data.

In January 2024, there were 665,569 active listings* on Realtor.com. That’s +8% above January 2023 (616,865 active listings), and +25% above housing boom times in January 2021 (531,775 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 January 2024 were -40% below January 2019 levels when there were 1,110,636 U.S. homes for sale.

January inventory/active listings total, by year, according to Realtor.com:

January 2017: 1,154,120

January 2018: 1,043,951

January 2019: 1,110,636

January 2020: 951,675

January 2021: 531,775

January 2022: 376,970

January 2023: 616,865

January 2024: 665,569

Big picture: National inventory levels still remain below pre-pandemic levels, suggesting more of a balancing housing market than a crashing one.

Seasonally speaking, inventory/active listings usually rise in January. That was the case this year, although the uptick was smaller than normal.

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

January 2017: -81,866

January 2018: -83,849

January 2019: -75,230

January 2020: -82,213

January 2021: -80,526

January 2022: -68,334

January 2023: -64,061

January 2024: -48,608

Unlike the first two charts which show U.S. active listings* (i.e. every home for sale in a given month), the third chart (right above) shows U.S. new listings** (i.e. homes coming on the market in a given month).

On the new listing front, there’s a tiny bit of good news for agents and loan officers who make their money on resale transactions: It appears that the lock-in effect might have peaked. While there were still -105,838 fewer new listings in January 2024 (295,178 new listings) compared to January 2019 (401,016 new listings), that so-called listing deficit is smaller now than it was last year when January 2023 (292,736 new listings) had -107,280 fewer listings than in January 2019.

The bad news for agents/brokers/loan officers: That’s still very low levels for new listings.

We're still very much in a constrained existing home market. Strained affordability has suppressed churn—folks who sell their home to buy something new—in the U.S. resale market.

* Active listings (i.e. what I often call “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.