2023: The Year Housing Inventory Surprised Us All

by Zachary Koops

As we reflect on the past year in real estate, one of the most striking aspects was how housing inventory defied all expectations. Contrary to popular belief, the housing market in 2023 presented a narrative quite different from what many had predicted.

Predictions vs. Reality

Entering 2023, there was a widespread expectation that housing inventory would significantly increase, potentially leading to a market crash reminiscent of 2008. However, the reality was far from this. Despite mortgage rates approaching 8%, the housing inventory story unfolded in an unexpectedly stable manner.

A Closer Look at Inventory Data

Throughout 2023, the weekly housing inventory data consistently contradicted earlier predictions. Even as mortgage rates exceeded 7.25%, the anticipated surge in inventory growth, ranging between 11,000 and 17,000 homes per week, never materialized. This stability in inventory levels, despite rising mortgage rates, indicated a more resilient housing market than many had anticipated.

New Listings: A Positive Sign

One of the more encouraging aspects of 2023’s housing market was the behavior of new listing data. Unlike in 2022, when new listings significantly declined as mortgage rates climbed over 6%, 2023 did not experience a further drop in new listings. This stability is a positive indicator for the housing market in 2024, suggesting a potential increase in new listings during the spring season.

Price Cut Percentage Data

Another interesting aspect of 2023’s market was the price cut percentage data. Despite the rise in mortgage rates and home prices, the proportion of homes with price cuts remained below the levels seen in 2022. This trend was somewhat surprising and highlighted the unique nature of the housing market in the second half of 2022.

Looking Ahead to 2024

As we move into 2024, the focus shifts to a more normalized housing environment. Key factors to watch will include labor data and its potential impact on inventory, as well as mortgage rates and their influence on market dynamics.