U.S. Home Inventory Data Analysis
U.S. home inventory has been rising quickly over the last six months. However, looking back at data since 2000, the overall inventory is still historically low. The key break-point appears to be the 2 million level on inventory. Currently, inventory in the United States stands at 1.33 million.
Investors should note that home inventory in certain regions has spiked dramatically while it remains extremely low in others. In the south, places like Texas and Florida have much higher inventory as homebuilders overbuilt to accomidate the inflow of new buyers from the north during Covid. That inflow of people has stopped and even started to reverse slightly.
Summary:
Overall, inventory of homes is rising quickly but still much lower than the long-term average. This implies home prices may start coming down a little, but not a ton...yet.
To see a dramatic home price drop, inventories need to spike above 2 million. For this to happen, a recession would likely have to hit the U.S. economy.