CALCULATEDRISK
By Bill McBride
This 2-part overview for mid-November provides a snapshot of the current housing market.
Note that we are missing some key pieces of data due to the government shutdown, such as housing starts and new home sales. However, most other housing data, like existing home inventory and house prices, are available from private sources.
The key stories this year for existing homes are that inventory increased sharply, and sales are down slightly compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure (although there will not be a huge wave of distressed sales). It now appears likely that existing home prices will be down nationally year-over-year by the end of 2025.
It has also been a disappointing year for new homebuilders (but not as horrible as the housing bust!). Homebuilders have a growing number of completed homes for sales, a larger than normal number of unsold homes under construction and are reducing prices to compete with more existing home inventory.
Active Listings for Existing Homes Up Year-over-year
Realtor.com reports in the October 2025 Monthly Housing Market Trends Report that new listings were up 5.1% year-over-year in October. And active listings were up 15.3% year-over-year.
Homebuyers found more options in October, as the number of actively listed homes rose 15.3% compared to the same time last year. While this marks the 24th consecutive month of year-on-year inventory gains, active listing growth has slowed in each of the past five months (down from 17% in September, 20.9% in August, 24.8% in July, 28.9% in June, and 31.5% in May). The number of homes for sale topped 1 million for the sixth consecutive month, unchanged since July. Still, nationwide October inventory remains 13.2% belowtypical 2017–19 levels, about the same as last month, an indication that the nationwide inventory recovery has stalled.
Note the seasonality for active listings. It appears inventory will still be below 2019 levels at the end of 2025.
Here is some more data on supply and sales.
The following graph shows the seasonal pattern for active single-family inventory since 2015 through November 7, 2025, from Altos Research. The red line is for 2025. The black line is for 2019.
Inventory was up 16.7% compared to the same week in 2024, and down 5.6% compared to the same week in 2019. Inventory likely peaked for the year.
Months-of-Supply
Since inventory has increased and sales have been flat, a key for house prices is to watch months-of-supply. The following graph shows months-of-supply since 2017 using data from the NAR. Note that months-of-supply is higher than the previous 8 years!
Months-of-supply was at 4.6 months in September compared to 4.0 months in September 2019. National months-of-supply is now above pre-pandemic levels.
It appears we will see minor national price declines with less than 5 months-of-supply.
In 2022, we saw some price declines at the National level even with fairly low months-of-supply – probably due to the sharp increase in inventory and some sellers panicking while remembering the housing bust!
There are significant regional differences in months-of-supply. Here is a table of the local markets I follow for September 2025. Areas in Florida and Texas – with high levels of months-of-supply – are seeing price declines.
Most cities with more than 5+ months of supply are seeing price declines. There is nothing magical about 6 months; some areas see price declines with less inventory, some more.
Sales
The NAR reported sales were at a “sseasonally adjusted annual rate of 4.06 million in September”.
Existing home sales were up 4.1% year-over-year in September. Sales have been mostly flat at close to 4 million SAAR for the last 2 1/2 years. This is running at the lowest level since 1995 on an annual basis.
Year-to-date, sales are down 0.2% NSA compared to the same period in 2024.
And for new home sales, the Census Bureau will release the data soon (with the end of the government shutdown).
Whenever I talk about housing, the first question is always “What will happen with house prices?” And I always start my answer discussing inventory.
Inventory will tell the tale.
In Part 2, I’ll review house prices, rents, mortgage rates, and more.