by Calculated Risk on 8/29/2022 09:31:00 AM

Inventory is still increasing, but the inventory build has slowed over the last two months.    Still, inventory is increasing faster than in 2019 at this time of year.  Here are the same week inventory changes for the last four years:

2022: +3.3K

2021: -0.4K

2020: -2.1K

2019: +2.8K

Inventory bottomed seasonally at the beginning of March 2022 and is now up 130% since then.  More than double!  Altos reports inventory is up 28.7% year-over-year and is now 26.8% above the peak last year.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of August 26th, inventory was at 555 thousand (7-day average), compared to 551 thousand the prior week.  Inventory was up 0.6% from the previous week. 

Inventory is still historically low. Compared to the same week in 2021, inventory is up 28.7% from 431 thousand, however compared to the same week in 2020 inventory is down 6.2% from 592 thousand.  Compared to 3 years ago, inventory is down 42.4% from 963 thousand.

Here are the inventory milestones I’m watching for with the Altos data:

1. The seasonal bottom (happened on March 4th for Altos) ✅

2. Inventory up year-over-year (happened on May 13th for Altos) ✅

3. Inventory up compared to two years ago (currently down 6.2% according to Altos)

4. Inventory up compared to 2019 (currently down 42.4%).

Here is a graph of the inventory change vs 2021, 2020 (milestone 3 above) and 2019 (milestone 4).

The blue line is the year-over-year data, the red line is compared to two years ago, and dashed purple is compared to 2019.

Two years ago (in 2020) inventory was declining all year, so the two-year comparison will get easier all year.  

Based on the recent increases in inventory, my current estimate is inventory will be up compared to 2020 in late September of this year.

A key will be if inventory keeps increasing in September.   

Mike Simonsen discusses this data regularly on Youtube.