More records set while certain metrics haven't changed in two years!

Supply – record lows, contradicting seasonal norms
- There were 26% fewer homes listed this July compared to last, by far the fewest of any July on record.
- The number of homes for sale remained roughly flat at its all-time record low, down 39% compared to last July and down even compared to June, which is abnormal.

Demand – still softening, but moderating
- Pending contracts are down only 3.2% from last July, the smallest decrease in this figure in quite some time. Pending contracts have been on a steady decline since May 2021, but after the last 3 months it appears to be flattening out – albeit at 2013 levels.
- July closings were down 24% compared to last year. I expect this metric will begin to flatten out soon because it trails Pending Contracts.

Supply/Demand Relationship – stable, seller’s market in MOST locations
- Seasonally adjusted housing supply still stands at 1.8 months, unchanged at 1.7-1.9 months for nearly two years, since November 2021.
- Some – but not all – areas that saw supply as high as 6-9 months (certain communities on Chicago’s South side) are back down under 6 and trending downward.
- Seasonally adjusted median days to contract remain at 10, steady between 8-10 days since July 2021.

Prices – flat
- July median sale price was up 4.3% compared to July 2022, the second consecutive month-over-month increase after 6+ months of slight decreases.
- Seasonally adjusted prices are still flat, as they have been since August 2022.

Mortgage rates – higher
- Today's (8/2/23) 30yr fixed averages 7.13% and has hovered just above or below 7% for the past 60 days. FHA/VA loans are around 6.8. There 5/1 ARM gets you a paltry discount of 0.18, and a 15yr fixed gets a 0.65 discount.
- The Federal Reserve increased the overnight borrowing rate by 0.25 at their July meeting as expected, bringing it to its highest level (5.25-5.5) since 2001. Markets are split on whether there will be further increases this year. After peaking a year ago at over 9%, inflation is down to 3%. The job market is still tight.

What to do (besides contact us for personalized advice)?
- Sellers: The advantage is still yours, but pricing is flat. Price carefully and you'll still sell quickly.
- Buyers: Tough love moment. If you’re waiting for affordability to improve by any significant amount, you might die holding your breath. Interest rates will continue to fluctuate and, yes, will at times be lower than today. But there is so little inventory and enough pent-up demand that any dips in interest rates will add fuel (more buyers) to the fire. Major change will need to take place to drastically increase the number of people selling their homes, and there’s no sign of what (or when) that might be.