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

Active national inventory for sale is up 23.5% on a year-over-year basis, however, still 37.7% below pre-pandemic levels

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When assessing current home pricing trends, ResiClub believes it's prudent to monitor active listings and months of supply. If active listings start to increase as homes remain on the market for longer periods, it may indicate potential future pricing weakness. Conversely, a rapid decline in active listings could suggest a market that is heating up.

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.

In March 2024, there were 694,820 active listings on Realtor.com. That’s +23.5% above March 2023 (562,444 active listings), and +96% above housing boom times in March 2022 (354,016 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 March 2024 were -37.7% below March 2019 levels when there were 1,115,940 U.S. homes for sale.

Click here to view an interactive version of the chart below

March inventory/active listings* total, according to Realtor.com:

March 2017: 1,172,713

March 2018: 1,067,281

March 2019: 1,115,940

March 2020: 937,319

March 2021: 440,589

March 2022: 354,016

March 2023: 562,444

March 2024: 694,820

Big picture for active listings: While active listing levels are rising year-over-year, national inventory levels still remain well below pre-pandemic levels. This suggests we're witnessing more of a balancing national housing market than a crashing one.

At a regional level, inventory trends vary greatly. Some markets are so tight, like Hartford, Conn., that home price growth remains elevated, while other pockets are experiencing significant inventory jumps, indicating potential future pricing softness.

This weekend, ResiClub PRO members will receive an article showcasing inventory trends down to the local level. It will include several interactive maps and updated access to the Lance Lambert Inventory Tracker, covering over 800 metros and 3,000 counties.

Click here to view an interactive version of the chart below

In December, we published a data-packed article for ResiClub PRO members, where we asserted: "The latest data suggests that the peak lock-in effect is behind us."

Fast-forward to today, and the evidence is even stronger.

On Thursday, we received data from Realtor.com for March 2024, indicating a measurement of 395,536 new listings for sale last month. This represents an +15.5% increase compared to March 2023, when there were 342,380 new listings. However, it's important to note that this figure is still -17.2% below the levels seen in March 2019, when there were 477,852 new listings.

In simple terms, while the lock-in effect is easing, it is still at play.

March new listings** total, according to Realtor.com

March 2017: 509,090

March 2018: 502,852

March 2019: 477,852

March 2020: 479,588

March 2021: 454,352

March 2022: 435,128

March 2023: 342,380

March 2024: 395,536

The reason that new listings still remain suppressed boils down to “switching costs.” Spiked mortgage rates have made the prospect of trading in a lower monthly payment/lower mortgage rate for a substantially higher one a daunting financial challenge. This financial burden, coupled with the psychological aspects of the change, has contributed to a reluctance among homeowners to list their properties for sale.

However, as time goes on, life events such as expanding families or other significant changes can act as catalysts in reducing so-called switching costs. Some people will simply get tired of waiting for mortgage rates to fall, and will move on with their lives.

Big picture for new listings: The lock-in effect is easing a bit as the initial mortgage rate shock recedes in the rearview mirror, and as some homeowners come to terms with the fact that their life circumstances have changed and that sub 4% mortgage rates aren’t returning anytime soon.

* Active listings = “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.

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