December Housing Report: Inventory Ends the Year Up 55% but Remains Below Historic Levels

Staff Report

Tuesday, January 24th, 2023

The U.S. housing market continued to show signs of normalizing in December, with inventory and time on market increasing and listing price growth moderating, according to the Monthly Housing Trends Report released today. After the frenzy of the past two years, this suggests good news for homebuyers in the new year with more options and more time to make a decision.

"In December, we saw both buyers and sellers pulling back as they continue to adjust to a challenging market. Buyers started 2022 facing high home prices and limited inventories, and ended the year with interest rates roughly double where they started. Despite significant cooling in sales in 2022, some indicators remain in high gear. Prices are still significantly higher and homes are selling faster compared to 2019 pre-pandemic levels," said Danielle Hale, Chief Economist for "Although demand has softened compared to last year, pushing home price growth into single-digit territory for the first time in 12 months, moderation in home price growth may encourage more buyers to return to the market in the months ahead, and may also be welcome news for sellers aiming to sell and buy at the same time. Affordability will remain a challenge and buyers will want to keep a close eye on their potential mortgage payment – a mortgage calculator is a great way to do this."

The supply of active listings for sale in the U.S. increased significantly in December over the previous year, signaling continued hesitation from buyers in the face of mortgage affordability and other obstacles. While the number of homes for sale continued to increase in the latter part of 2022, inventory is still significantly lower than it was in 2019 before the pandemic. Home sellers also continued to be less active in December and fewer listed their home for sale compared to one year ago.