Stocks nearly doubled from March low

on Estimated risk per 07/04/2022 09:40:00

Inventories are rapidly increasing. Stocks hit their seasonal low in early March 2022. now up to 97% since then. Almost double!

Altos says inventories are up 27.4% year-over-year and are now 8.7% above their 2021 peak.

Altos home inventoryClick on a graph to enlarge the image in the graph gallery.

This inventory chart is courtesy of Altos Research.

As of July 1, inventory was 476K (average over 7 days) compared to 444K the previous week. Inventories rose 7.0% from the previous week.. Stocks are increasing much faster than usual for this time of year (both in percentage terms and in total stock added).

Stocks are still historically low. Compared to the same week in 2021, inventories are up 27.4% from 373k, but compared to the same week in 2020, inventories are down 28.6% from 666k. Compared to 3 years earlier, inventories decreased by 50.3% from 958 thousand.

Here are the inventory milestones I track with Altos data:

1. Seasonal bottom (happened March 4th for Altos) ✅

2. Inventory compared to last year (happened May 13th for Altos) ✅

3. Inventory increased from two years ago (now down 27.4% according to Altos).

4. Stocks increased compared to 2019 (currently down 50.5%).

Altos home inventory

Here is a graph of stock changes compared to 2021, 2020 (stage 3 above) and 2019 (stage 4).

The blue line is year-on-year data, the red line is compared to two years ago, and the purple dotted line is 2019.

Two years ago (in 2020) inventories were declining throughout the year, so comparing two years would be easier throughout the year.

Based on the recent increase in inventories, my current estimate is that inventories will rise from 2020 in the third quarter of this year. (in the next couple of months) and return to 2019 levels in early 2023.