Home prices appear to have dropped further last month, with the median price per square foot for single family homes down by 4.2% from a month prior. (Insert usual disclaimer about this being a noisy figure and Case-Shiller being a lot more accurate).
Here’s a visual:
In inflation-adjusted terms, home prices have just about round-tripped to where they were a year ago:
Real monthly payments are still up 30%+ though! And this doesn’t account for the recent surge to the 6% range for rates.
Switching to supply/demand… inventory flattened out (actually even declined slightly), after its recent upward surge:
And pending sales bounced a bit:
…resulting in a decent-sized pullback in months of inventory:
Here’s what months of inventory looks like on a longer time scale. We are actually at middle of the road levels for the post-bust era, notwithstanding the violent upward move it took to get here.
This chart is starting to get pretty weird (and I keep having to expand the scale in one direction or another!):
That pullback in months of inventory is a positive sign for the market…. it indicates that supply and demand are getting back into balance at the current price level. I continue to suspect there’s more downside than upside risk to prices here, especially as the recent spike up in rates has yet to be absorbed… but the stabilization of inventory suggests a reasonably healthy market at least in the near term.
More graphs below, and if you missed it, I recently updated the valuation graphs.