Last week’s drop in inventory was no fluke as new data from Altos Research finds housing inventory has fallen for the second week in a row.
- Supply fell to 547,000 single-family homes, this is 1% lower than the previous week which had also dropped 1.0% from the previous week.
- This is 25% fewer new listings each week than is expected for this time of year.
Worse Than Expected. Mike Simonson, CEO of Altos, expected we’d have 625k homes on the market now, but we only have 547k. He is now projecting 470k at the end of the year. However, he thinks, based on current trends, that could easily be too high.
Prices Falling With Inventory. Home prices have been slowly pulling back and this week was no different. The median home price in the US this week is $439,900, this is only $100 dollars less than last week but is down 3.3% from the high reported back in early July.
- Simonson believes prices will settle under $420,000 by the end of the year, a 7.7% decline from the peak.
Prices cuts. Price cuts are still happening but they have leveled off at around 40% of the homes on the market have had a price cut Simsonsen argued that the predictions of a tanking housing market just can’t happen with these inventory levels. “The supply of homes for sale is just too short for the market to tank hard.”
BOTTOM LINE: Chances of an inventory Armageddon have been getting smaller since July and now, after two weeks of declining, it seem almost impossible.