Prices have leveled off in the last couple of months…

…which is interesting in light of a decrease in months of
inventory:

This is the opposite of the usual relationship between the two, as
shown in the below graph (with months of inventory inverted), in
which lower inventory tends to correspond to higher price increases
and vice-versa.  The recent divergence from that pattern is
pretty unusual:

Prices do tend to flatten out near the end of the year regardless of
supply considerations — witness Dec 2012-Jan 2013 when prices
flattened and then went negative despite a lack of supply on
par  with what we’re seeing now.  However, we are talking
about August data here, so it seems a bit early for that to be the
explanation.

I’d expect the two lines to converge again over time, which implies
one of two outcomes (or, I suppose a combination of both):

• Prices start to increase again
• Months of inventory increases (driving the inverted blue line
  down), which in turn would result from some combination of
  reduced demand and increased inventory on the market

It’s also possible that this relationship has broken down, but it’s
worked pretty well over time, and it makes sense that it should
work: fewer months of inventory means some combination of more
demand/less supply, which should correspond to upward
pressure on prices.  (And the other way around).

We’ll see what happens.  More graphs to ponder below.