Inventory levels are extremely tight. There are only 980,000 existing homes for sale countrywide. The monthly supply is very tight as well with only a 2.6 months’ supply of homes. In a normal market, there is a 4.6 months’ supply. However, once again when we look at active listings there are only 563,000 homes available for purchase. This means that roughly 40% of homes included in the existing inventory are under contract!
The median home price is up 2.2% from the previous month coming in at $375,700 but is down 0.9% on a year-over-year basis. It’s important to note that the median home price is not indicative of appreciation. The median home price is the “middle-priced home.” So, when you see more lower-priced homes sell, you’ll see the median home price fall. You could have all home prices increase, but still see the median home price fall if there’s more concentration on the lower priced homes. Again, this has nothing to do with appreciation. Appreciation numbers are higher year over year, not lower.
As we can see, Existing Home Sales are slightly lower but not as bad as analysts expected. It is evident that the housing market is still heavily sought out and inventory levels are low at first look, but they are even lower when you look deeper into the report again when looking at homes that are actually listed for sale. The dynamics of this current market are supportive of home pricing because inventory is still low and demand is still strong.