Why did the growth rate of housing inventory drop by half this year?

"Housing inventory is now in its traditional seasonal decline for December, but the inventory growth story, which I was thrilled to see earlier in the year, has changed a lot over the last few months. The latest inventory growth percentage is now down to 13.54%, which is still positive but not as strong as the 30%+ growth we saw earlier in the year."

"A few things here: we had more sellers who were going to be buyers earlier in 2025, as purchase application data consistently showed positive year-over-year growth. And for the first time in many years, our new listings data returned to the low levels we would consider normal. However, mortgage rates didn't break below 6.64% until the second half of 2025."

"New listings growth peaked late May; some sellers just called it quits, and then mortgage demand and sales picked up. In fact, the last existing home sales report came in at a 9-month high. When you're working from the lowest bar in sales ever, once adjusting to the population, it doesn't take much to move the needle. So that is the most straightforward answer for housing."

Housing inventory entered its traditional December seasonal decline while inventory growth slowed to 13.54%, down from 30%+ earlier in the year. New listings returned to low, normal levels for the first time in years, with new listings growth peaking in late May before the seasonal drop. Mortgage rates remained above 6.64% until the second half of 2025, delaying stronger inventory recovery. Mortgage demand and sales picked up afterward, and existing home sales reached a nine-month high. S&P Case-Shiller home price indices firmed slightly month-to-month. Weekly inventory fell from 775,339 to 757,76 and from 682,152 to 667,417 year-over-year.

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