Source: CalculatedRisk Newsletter —
New Listings Have Declined Significantly
Here is a graph of new listing from Realtor.com’s December Housing Trends Report showing new listings were down about 21% year-over-year in December.
And the local markets I track that have reported so far, show new listings were down more in December than in November.
For these areas, new listings were down 33.4% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.
Last month, new listings in these markets were down 26.6% YoY
Impact on Inventory
The following graph shows the seasonal pattern for active single-family inventory since 2015. The red Dot is for the first week of 2023. The black line is for 2019.
Inventory was up 61.4% compared to the same week in 2022, and down 42.3% compared to the first week in 2019. Recently inventory has been increasing again YoY, even with new listings down further. A key will when inventory starts increasing in 2023 (the bottom is usually in February of each year).
For new homes, there are 5.5 months of homes under construction (blue line below) – well above the normal level. This elevated level of homes under construction is due to supply chain constraints. There are 1.2 months of completed homes for sale (red) – getting close to the normal level.
It is likely we will see a sharp increase in completed inventory over the next several months – and that will put pressure on new home prices. Note: Due to the increase in cancellations, the Census Bureau is probably overstating sales, and understating inventory – especially completed inventory.
And for housing starts there are a record 1.71 million units under construction.
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