National Data

Home Inventory is Climbing Even Faster Than Last Year

By Mike Simonsen on September 25, 2023


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Mike Simonsen

Mike Simonsen is the founder and president of real estate analytics firm Altos Research, which has provided national and local real estate data to financial institutions, real estate professionals, and investors across the country for more than 15 years. An expert trendspotter, Mike uses Altos data to identify market shifts months before they hit the headlines.

Available inventory of homes for sale is on the rise in late September, which is very unusual for this time of year. In fact, inventory is growing faster than last year at this time. This is a demand-driven slowdown, because new listings supply is still running 9-10% fewer homes for sale each week than last year. Inventory is building as homebuyers wait to see if mortgage rates will come down to make purchases more affordable. Fewer new sellers also means that inventory can’t grow too much; the real trouble develops when demand drops and supply surges. There’s no supply surge, but there is a notable demand drop. Consumers are very sensitive to changes in mortgage rates, and mortgage rates are still rising. 

We can see these slowing changes build up each week. It’s a pretty sharp change from what was a surprisingly strong first half of the year.

Every week Altos Research tracks every home for sale in the country. We analyze all the pricing, supply and demand, and all the changes in that data and we make it available to you before you see it in the traditional channels. If you aren’t using Altos market reports with your clients, your buyers and sellers, now might be the time to step up. Go to and book a free consult with our team. Because everyone is worried about what’s happening right now. They need you to help them see clearly. The data we cover here in these national videos is available for every zip code in the US. Join us to dive in.

I’m Mike Simonsen, I’m the founder of Altos Research. Let’s look at the data for the week of September 25th. Please refer to the video below for all the charts I mention in this transcript!




There are now 528,000 single family homes on the market. That’s an increase of 1.8% from last week. Normally by this point in September, available inventory is declining slightly each week. It’s late in the summer, so normally new listing volume is declining, the last few sales of the peak summer months are concluding. So the fact that inventory grew by nearly 2% this week and last week is quite telling for how home buyers are reacting to the highest mortgage rates in over 2 decades. 

In this chart of each year’s inventory curves you can see that the number of homes on the market is climbing faster now than last year. This year is the dark red curve, last year the light red. Mortgage rates continue to climb so there is no immediate relief for homebuyers on the horizon either. At this point it looks like we may see inventory grow to the end of October like we did last year. Look at the divergence in the curves from this year and the tan line from two years ago,  when we were still in the middle of the pandemic housing boom and record low mortgage rates.


Sales Rate


New pending sales each week continue to run 10-15% below last year’s pace. If you follow the National Association of Realtors when they publish their existing home sales report each month, you’ll know that the recent report last week showed a sales pace of only 4 million seasonally adjusted annual home sales. The NAR report was just released for August, and we can already see in the data that there is no signs of improvement for the sales count through September and October. The home sales that are in contract now will close mostly in October. It’s not hard to imagine that next month’s seasonally adjusted home sales data from NAR will come in under 4 million. 

In this chart each bar is the total number of home sales pending at any given week. The shorter the bar, the fewer sales that are in process. The light portion of the bar is the count of new pendings each week. There are now 344,000 single family homes in contract to close in the next couple months. That’s 14% fewer than last year and almost 30% fewer than in September of 2021.  Home sales are limited by the decreased demand of course, and they’re also limited by the very low supply of new listings. You can’t buy what’s not for sale. We’ve been talking all year about being supply constrained, but right now the sales are limited by declining demand from still climbing mortgage rates.


Price Reductions


We can see the impact of the weakening demand starting to creep into the pricing indicators. In this chart we look at the leading indicator price reductions. This is the percent of the homes on the market that have taken a price cut from their original list price.  For a while earlier this year demand was exceeding supply in residential real estate and you could measure that demand with the price reductions curve improving each week. As mortgage rates lurched over 7% to their new highs, suddenly there are fewer offers.

And price reductions are climbing again. 37% of the market has taken a price cut. That’s more than any recent year except last year at this time. Price reductions are accelerating now, which bodes negatively for future transaction prices. A normal balanced market will have price reductions around 30-35% of the homes for sale with price cuts, so as this dark red line approaches 40%, that’s a clear indicator that buyers are making fewer offers.  Remember the slope of this line captures how many properties are taking price cuts newly each week. And this slope is increasing now. These are transactions that will happen in the future, so it implies sales price weakness in the 4th quarter, which you’ll hear about in the headlines after the new year. But you can see it in the data now.


Home Prices

The median price of single family homes in the US right now is $440,000. That’s down 1% from last week and it’s just a tiny fraction higher than last year at this time. We can see the pressure on home prices in the last few weeks. Home prices step downward in September for the seasonal change every year, and you can detect strength or weakness relative to other years’ changes. What we can see now is that year over year home price gains are just barely positive. And the comparison is getting weaker, not stronger as our current mortgage markets deteriorate. There are fewer offers and those that happen are happening at slight discounts each week. 

Last year at this time there were big price discounts about to get applied. So our October comparisons may get slightly easier, but I sure haven’t seen any signals of price strength now, so the question is will this Q4 be less bad than last Q4? The median price of the new listings is fractionally higher than last year at $398,500.  Will be fascinating to watch the light colored line here over the next couple weeks. The new listings are where you see the price weakness first. And last year they were already headed lower.

The price of the new contracts this week came in at $370,000. These are the pending sales that went into contract in the last week. Prices of the homes going into contract are lower than last year by a fraction. The next few weeks will be fascinating to watch this stat too. Last year in the middle of September is when mortgage rates jumped from 6 to 6.5 to 7.5%. By early October any offers that were being made for purchases were happening at notably lower price points. Last year by the end of September the new pending sales prices were dropping by 3% per week. Will that happen again? Mortgage rates are even higher now than they were last year. In this chart you can see the light colored line started a big decline this week last year. This was the moment that buyers reacted to newly increased mortgage rates. So we’re watching to see where the new contracts come in over the next few weeks.

The macro trends impacting housing interest rates and the Fed, have not given us any reprieve yet. The signals as of today are that mortgage rates are still headed higher. We discussed last week how consumer expectations for future mortgage rates have moved higher too so potential homebuyers are less optimistic than they were at the start of the year. And that’s what we’re seeing in the data every week now.

I think it’s important to point out though that while buyer demand has backed off this fall, there is still no sign of any surge in new supply coming to the market. It can be very easy to focus on the negative momentum. For people on the fence they should also know that while their competition is lessening there is no sign of any flood of inventory and that may be an important factor in their home buying decisions. 

Want to get these kinds of market insights for your local market, to help your buyers and sellers get an edge? Go to and book time with our team to learn how to interpret the market signals for the people who need it most right now. They need you to be the expert for them.

You can also run a free Altos real estate market report for any zip code in the U.S. and receive an update on that area in your inbox every week.

And, if you want to learn how to read and interpret all the stats in the report, I encourage you to download our free eBook: "How to Use Market Data to Build Your Real Estate Business."

See you next week!

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