By Logan Mohtashami | HousingWire
When I came up with the “savagely unhealthy housing market” label in February of this year, it was based on the premise that the housing inflation story that we have had to deal with since 2020 was a historical event. It facilitated a very unhealthy housing market in 2020-2021 that became savage in 2022. The biggest cause was a lack of choices for American homebuyers.
Inventory, which has been falling for years, broke to all-time lows in 2020. We didn’t have a seasonal push in inventory in 2020, and things worsened in 2021. To top it all off, we started 2022 at all-time lows, forcing bidding action everywhere until mortgage rates rose. And we aren’t talking about your grandfather’s mortgage rates rising; we went from 2.5% to over 7% in a very short period of time.
Of course, this has brought back some inventory, as demand weakness always creates inventory through accumulation. However, as we can see below, we are not back to the historical norms of 2-2.5 million active listings, but at just 1.28 million today.
