The inventory of new homes for sale has been rising for six months now, and in February the supply of existing homes for sale posted its first meaningful increase in two years. Admittedly, the 3.7% m/m rise, to 2.02m homes, could quickly be reversed. But we get the sense that, with selling conditions improving and more households being taken out of negative equity, there will be further rises in the inventory of homes for sale later this year. Nevertheless, with housing demand strong and strengthening, any increase in supply is unlikely to derail the recovery in house prices now firmly in train.
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