by Calculated Risk on 9/01/2022 11:54:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Active vs Total Existing Home Inventory

Excerpt:

Over a year ago, housing economist Tom Lawler noted the divergence in the change in total inventory vs the change in active inventory. He wrote:

As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for many of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months.

This is important since it is active inventory that is the available inventory for buyers. ...

Today, Sabrina Speianu and Danielle Hale at Realtor.com released their monthly report for August. This report has graphs for both total inventory and active inventory. ...

And here is their data on active listings:

Nationally, the inventory of homes actively for sale on a typical day in August increased by 26.6% over the past year. … However, driven by a decline in seller sentiment, the inventory growth rate in August was lower than July’s historical growth rate of 30.7%, which was the largest increase in inventory in the data history.

... The bottom-line is active inventory is the key metric to follow.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/