A Slightly Less Gloomy Way to View Another Big Drop in Existing Home Sales
The state of the housing market in 2022 is well known by now. The sharpest rate spike in 40 years to the highest rates in 20 years combined with the overvaluation from 2 years of brutally fast appreciation to create a rapid cooling in demand and, more recently, prices.
Slightly less obvious to those outside the industry is the extreme and ongoing inventory crunch. Units available for sale continue treading water at record lows. This is noticeably different from the most recent example of plummeting sales (2006-2008) when inventory began stacking up almost immediately.
We can get a slightly more focused look at the "sales vs inventory" metric by simply subtracting one from the other. The following chart shows sales vs inventory.
This is a better gauge of the contrac
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