Home inventory rises in July but the hot housing market has room to run

July inventory uncharacteristically climbed 4.0% from June, marking the first two consecutive months of month-over-month inventory gains since April and May 2019. At the same time, July's 1.3 Months of Inventory set a new report low for the month. July home sales were the third largest total in the report's 13-year history, although they declined 8.4% from June – a seasonal norm. The July median home price of $331,000 decreased 1.2% from June's record $335,000. 

"The month-over-month gain in inventory, extending a short trend that started in June, was great news – even though the shortage of listings remains a major challenge," says Nick Bailey, President, RE/MAX, LLC. "Some buyers have stepped away in light of high prices, seller expectations, multiple offers and intense competition, but new listings are still selling quickly. Clearly, the demand is still there. The market should continue to run hot, especially if interest rates remain low, prices stabilize a bit, and more sellers jump in to take advantage." 

With year-over-year comparisons skewed by the pandemic, June-to-July averages for 2015-2019 illustrate what's typical in mid-summer:

• The month-over-month decline of 1.2% in July's Median Sales Price was less than the 2015-2019 average June-to-July drop of 2.2%. Year over year, the Median Sales Price is up 16.2%.
• The 4.0% increase in month-over-month inventory was atypical for this time of year – and a far cry from the 2015-2019 average June-to-July decline of 1.6%. Although this marked the second consecutive month of gain (June inventory grew 1.9% from May), inventory remains down 29.7% year-over-year.
• The third largest total in the 13-year history of the report, July 2021 home sales dropped 8.4% – nearly identical to the 2015-2019 average decline of 8.2%. Year over year, sales were down 3.1%. The only months with more sales than July 2021 were June 2021 and July 2020.

Bailey continues: "In the past 13 months, we've seen the top three months of sales activity in 13 years of doing this report. That says a lot about today's buyers. Given all the factors favoring sellers right now, it's the buyers who are driving this very active market."

July's average Days on Market of 23 was one day less than June and 21 days faster compared to the same time last year. July's 1.3 Months Supply of Inventory was identical to June's, but significantly less than July 2020's 2.0 Months Supply.