by Calculated Risk on 4/09/2025 11:14:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-April 2025

A brief excerpt:

This 2-part overview for mid-April provides a snapshot of the current housing market.

At this moment, we can’t talk housing without mentioning the overall economy.

Just over two weeks ago, I revised down my outlook for housing this year, see Policy and 2025 Housing Outlook. Since then, policy and the outlook have taken a turn for the worse. One point I made in March was:

And another factor is the recent stock market volatility. Ten percent corrections are common, a further sell-off will have a negative wealth effect for potential home buyers.

Stock markets are now down around 20% (with crazy volatility). And it is likely this will negatively impact home sales.

On my blog, I went on Recession Watch over the weekend (not predicting a recession yet because the U.S. economy is very resilient, was on solid footing at the beginning of the year, and the tariffs might be lowered or reversed). And I discussed some of the data I’ll be watching in Recession Watch Metrics.

And on housing: Inventory, inventory, inventory! Inventory is increasing sharply, and inventory usually tells the tale.
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Since both inventory and sales have fallen significantly, a key for house prices is to watch months-of-supply. The following graph shows months-of-supply since 2017. The following graph shows months-of-supply since 2017. Note that months-of-supply is higher than 6 of the last 8 years, and at the same level as in 2017.

Months-of-supply was at 3.5 months in February compared to 3.6 months in February 2019. It appears national months-of-supply will be above pre-pandemic levels this summer, and likely above 5.0 months (putting some pressure on prices).

Inventory would probably have to increase to 5 1/2 to 6 months of supply to see national price declines again.

There is much more in the article.

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