Active listings in July rose 5.3% from June and are now up 37% when compared to a year ago. While some media reports have claimed that the increase in inventory could lead to a housing crash, analyzing the figures in context is crucial. The increases we saw last month are from very low levels, as active listings are still down almost 30% from the pre-pandemic totals seen in July of 2019. The inventory build we have seen this year has also been very concentrated, as there are only four states (Texas, Idaho, Florida, and Tennessee) with higher inventory levels than five years ago. This is compared to some parts of the Northeast, where active listings are down 65% to 75% over that same period. In addition, seasonal inventory building into the summer months is a normal pattern that we see every year. This is mainly due to children and schools, as parents like to have their move done before the start of the school year.
What’s the bottom line? Inventory is still tight comparatively and will likely start to decline heading into the fall due to the normal seasonality we see each year. Demand is also likely to rise when rates come down further. Overall, this situation remains supportive of home prices.