Housing Inventories Keep Dropping

Yesterday’s Existing Home Sales data from the National Association of Realtors for the month of November continued to impress. As discussed in last night’s Closer, Existing Sales came in at 6.69 million SAAR. Although lower, snapping a streak of five straight months of increases, sales continue to come in at some of the highest levels since 2006.  With sales running at such a strong clip recently, inventory numbers have been nothing short of remarkable: there are only 1.32 million listed units nationally with 1.12 million single-family homes listed. Both respective readings are the lowest levels of the past two decades. Even with declines in volumes, the ongoing collapse in inventory levels has driven the number of units in inventory down to 2.37 months’ sales (only 2.25 months for single-family homes), a new record low. We should note that implied new listings have indeed risen. They stand in the mid-6mm SAAR range, the highest since 2007 but still about 20% below the 8mm range that they hit in the mid-2000s. While prices are still extremely high, they did drop sequentially on the month thanks most likely to a shift in mix towards lower-value homes. 

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