US home inventory remains approximately neutral for prices

26 Apr 2012 by Jim Fickett.

Last week the National Association of Realtors reported existing home inventory, and on Tuesday S&P reported the Case Shiller house price index. Inventory is at about 6 months, which may be slightly positive for prices, but inventory tends to rise this time of year, so it is not time to get excited yet. Prices rose month-to-month, but most month-to-month price rises have been negative lately, and there is no clear change in trend.

There has been a lot of talk lately about the housing market turning the corner (Calculated Risk compiles some price bottom calls) and, indeed, it does seem that we've seen most of the price decline and construction decline. But that doesn't mean there is likely to be a boom any time soon.

With the huge backlog in dud loans still to clear,

no evidence of construction really taking off,

and most price changes in recent months still negative, I agree with Robert Shiller, who recently said,

I could see it staying languishing and edging down for years.

[See the Reference page Inventory of existing US homes for data sources and background.]]