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Inventory of existing US homes

This page is about the inventory of existing homes on the market, as calculated by the National Association of Realtors, including single family homes, condos, and coops. The main question is the effect of inventory on prices.

Summary

2 May 2013.

Inventory is back to boomtime lows and, using the 20-city Case-Shiller index, seasonally adjusted, prices have been in a rising trend for about a year and a half. Nevertheless, continued increases depend on unusual circumstances (professional investors entering the single-home market, and very low interest rates), and may or may not continue.

There is a strong, inverse correlation between inventory in months of supply and price changes, with prices typically falling when inventory is above about a seven month supply. (Background.)

Graphs

2 May 2013. Data through Mar 2013.

The first graph shows existing home inventory in both millions of homes and months of supply at the contemporaneous sales rate. The second graph shows the inventory in months of supply, together with the one month percent change in the seasonally adjusted Case-Shiller 20-city house price index. Click either graph for a larger image.

See 12 May 2009 clipping below for a longer-term graph of inventory going back to 1990.

Highlights

Inventory of existing US homes background (24 Aug 2010) The number most often discussed is total inventory, including single-family, townhomes, condominiums and co-ops. Total inventory numbers only go back to 1999, but are often extended using the earlier series on single-family-only, going back to 1982. Using the joint series, the all time record for inventory is above 13 months of supply.

Homes in foreclosure would not normally be listed, as the auctions take place outside the MLS listing. However most REOs are listed and included.

House prices and inventory are inversely related, with house prices normally rising when inventory, in months of supply, is below 6 months, and falling when above 6 months.


US home forfeitures (26 Apr 2013) Home forfeitures are probably in a very gentle declining trend. Projecting from current trends suggests another few years may be needed to bring the backlog of distressed loans down to a more normal level.



Sources

See also

Clippings below were used in the construction of this page

Inventory started to rise in 2005

26 Jan 2009. Calculated Risk.

http://www.calculatedriskblog.com/2009/01/existing-home-sales-nsa.html

“Existing Home Sales (NSA). by CalculatedRisk”

“Inventory levels were flat for years (during the bubble), but started increasing at the end of 2005. … If you look at the 2005 inventory data, instead of staying flat for most of the year (like the previous bubble years), inventory continued to increase all year. That was one of the key signs that led me to call the top in the housing market!”

Graph of inventory 1990 to 2009

12 May 2009. Cleveland Fed Economic Trends.

http://www.clevelandfed.org/research/trends/2009/0509/05ecoact.cfm

“Is the Housing Bust Over? Michael Shenk”