July Existing Home Sales: Signs of Balance

• July existing home sales were up 2% from June and 1.5% from July 2020, to 5.99 million units (SAAR), according to the National Association of Realtors.
• Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June but down 12% from one year ago (1.5 million).
• The median existing-home price for all housing types in July was $359,900, up 17.8% from July 2020 but down from 23.2% annual growth in June.

July existing home sales continued to build on the surprisingly strong momentum from June, with demand holding firm in the face of still rapidly rising prices -- boosted, in part, by gains in inventory that are starting to offer buyers meaningfully more choice. The market remains competitive, and historically strong price growth continues to limit some households’ ability to confidently afford their next home. But after months of plumbing new lows, for-sale inventory has begun to meaningfully recover in recent months as sellers come out of the woodwork, providing home shoppers with more options and likely easing some of the upward pressure on home prices in coming months. Home prices grew less slowly year-over-year in July than in June, the first such monthly slowdown since December 2020, though annual growth remains very fast. And mortgage rates remain near record-lows, continuing to present would-be homebuyers with favorable financing, aiding affordability. It may not be obvious from the July existing home sales data, but signs are emerging that more balance may slowly be coming back to the housing market, offering homebuyers a bit more to work with in ways that could translate to more home sales in the coming months.