The pattern of seasonal housing inventory peaks and bottoms has been shifting later in recent years. Last week, there was a noticeable decrease in both active inventory and new listings, which could be attributed to the election. In the past couple of years, mortgage rates have dropped starting in mid-November, leading to positive housing demand data. Will this trend continue?
Weekly housing inventory data
If the inventory peak has already occurred, the positive aspect for the housing market in 2024 is the healthy growth in inventory to accommodate demand if mortgage rates decrease to 6% or lower. The consistent model of normal inventory growth, between 11,000 and 17,000 per week, has been maintained this year. We haven’t seen a print over 17,000 in 2024, but several prints between 11,000 and 17,000, which was not achievable last year.
- Weekly inventory change (Nov. 1-Nov. 8): Inventory dropped from 735,718 to 721,576
- The same week last year (Nov. 3-Nov 10): Inventory increased from 566,882 to 566,941
- The all-time inventory bottom was in 2022 at 240,497
- The inventory peak for 2024 so far is 739,434
- For context, active listings for this week in 2015 were 1,140,557
New listings data
An encouraging aspect for 2024 is the growth in new listings data. While missing the target level by 5,000 this year, any growth is positive. 2024 is set to be the second-lowest year for new listings ever, with last week recording the lowest new listings data in history.
New listings data can fluctuate significantly week by week, and the previous week saw a significant decline. Perhaps some homeowners delayed listing their properties until after the election. However, with Thanksgiving approaching, a seasonal decline in inventory is common at this point.
- 2024: 48,863
- 2023: 55,327
- 2022: 52,643
Price-cut percentage
In an average year, about one-third of all homes undergo a price cut, which is a standard housing activity. The price-cut percentage tends to increase with rising mortgage rates and decrease when rates drop. In recent data, we saw a seasonal decline in the price-growth data last week.
Despite expectations of cooling price growth in the second half of 2024, the pricing has remained firm. The price-cut percentage declined earlier this year compared to previous years, indicating a more modest movement with the increased inventory in 2024.
Here are the price-cut percentages from last week in the previous few years:
- 2024: 38.8%
- 2023: 39%
- 2022: 43%
Purchase application data
The purchase application data has been trending negatively in the past four weeks due to higher mortgage rates. This data typically takes 30-90 days to impact sales data, which is reflected in the current downward trend.