Why are home prices at all-time highs with more inventory?
Both existing housing inventory and home prices have been rising together year over year, which might seem odd at first glance since existing home sales are trending near all-time lows. However, I can clear up any confusion on this topic.
Let’s keep it simple: total active listings are still below 2019 levels nationally, and the days on market are under 30 days today. Existing home sales aren’t crashing as they did in 2022, when we saw home-price declines in the second half of 2022. When you connect the dots, this is a short and simple answer to why housing inventory and home prices are both rising.
From NAR: Existing-home sales slipped 0.7% in May to a seasonally adjusted annual rate of 4.11 million. Sales descended 2.8% from one year ago. The median existing-home sales price jumped 5.8% from May 2023 to $419,300 – the highest price ever recorded and the eleventh consecutive month of year-over-year price gains. The inventory of unsold existing homes grew 6.7% from the previous month to 1.28 million at the end of May, or the equivalent of 3.7 months’ supply at the current monthly sales pace.Below are four charts showing the data from NAR mentioned above.
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