U.S. housing inventory declines but shows year-over-year growth

U.S. housing inventory fell by 42,133 homes from December 2024 to January 2025, totaling 829,376 active listings. This decline is smaller than the average drop of 69,646 homes for this period since 2017. Year-over-year, active inventory is up 25%, suggesting a potential increase in overall inventory by the end of 2025. This shift may give homebuyers more negotiating power in various markets. Despite the increase, January 2025 inventory remains 25% below pre-pandemic levels from January 2019. Market conditions vary, with the Northeast and Midwest remaining tight, while the Gulf region shows signs of softening.