Estimated Risk: July 11 Housing Inventory Update: Up 32% YOY

on Estimated risk per 11.07.2022 10:15:00

Inventories are rapidly increasing. Stocks hit their seasonal low in early March 2022. now up to 104% since then. More than double!

Altos says inventories are up 31.7% year-over-year and are now 12.3% above last year’s peak.

Altos home inventory Click on the graph to enlarge the image.

This inventory chart is courtesy of Altos Research.

As of July 8, inventories were 491k (7-day average) compared to 476k the previous week.

Inventories usually stay the same or drop slightly over the July 4th weekend. Inventories are up 3.2% this year from the previous week.. Stocks are growing 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 increased by 31.7% from 373 thousand, however, compared to the same week in 2020, inventories decreased by 25.0% from 654 thousand. Compared to 3 years earlier, inventories decreased by 48.9% from 961 thousand pieces.

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. Stocks increased from two years ago (now down 25.0% according to Altos).

4. Stocks increased compared to 2019 (now down 48.9%).

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 at the end of August this year. (in the next couple of months) and return to 2019 levels in early 2023.