Key facts
- Housing inventory is down year over year but considered at a healthy level with 4.6 months of supply.
- National home price growth is at 2.0%, below wage growth of 3.2%.
- Existing-home sales have increased 0.7% year-over-year and are up 2.4% year-to-date.
- Housing demand has shown resilience when mortgage rates are near 6%.
Housing inventory remains stable with 4.6 months of supply, indicating a functioning market despite a slight year-over-year decrease, according to the National Association of REALTORS® (NAR) existing home sales report. National price growth is at a healthy 2.0%, which is below the 3.2% wage growth reported in the July jobs report, suggesting improving affordability.
While inventory levels are not at pre-pandemic highs, they are considered healthy, falling within the 1.52 million to 1.93 million unit range with four months of supply. This has helped to moderate price growth, which was significantly higher in 2020, 2021, and 2022. The current price growth trend is allowing affordability to improve without a substantial decrease in mortgage rates.
Existing-home sales saw a 1.7% month-over-month decrease but a 0.7% year-over-year increase, with year-to-date sales up 2.4%. NAR Chief Economist Lawrence Yun noted that sales have been stable despite rising mortgage rates, and would thrive if rates returned closer to 6%. Demand has historically performed better when rates are below 6.64%, with current demand showing signs of slowing as rates exceed this level.
Purchase application data shows a 3% week-to-week increase but a 1% year-over-year decrease, influenced by last year's falling rates that boosted demand. Overall, the housing market shows modest price increases and stable sales, with inventory growth contributing to a better market condition compared to the post-COVID years, even with mortgage rates near yearly highs.