December is always an unusual month in that closed sales typically
increase (presumably people trying to jam the deal through before
year-end), while pendings sales drop (presumably due to holiday
disruption):

This year, the decline in pendings was unusually large, with a 23%
decline from November’s number.  I wouldn’t make too much of
that data point alone, because the data can be pretty
noisy.  But as a result, even though inventory declined in
December, the all-important months of inventory figure rose quite a
bit for the month:

It’s still lower than the past 2 years, though, and still reasonably
low on a longer-term basis:

So unless the decline in pendings is a real thing that persists, and
not a one-month aberration, I would still say that the SD market is
pretty undersupplied and supportive of potential near-term price
increases.  Let’s see how the new year plays out.

Graph-fest below….