Inventory dropped again, prices rose again, and “The Chart”
continues to do a bang-up job in indicating home price
Here’s inventory, lest people thought last month’s rise was the
start of a new trend:
And prices continued to rise in a very orderly manner. We are
not far from the mid-2010 post-crash peak at this point:
Here’s The Chart. Blue line is months of inventory (inverted,
to show the correlation better). Red line is monthly price
There is a strong correlation here, and I think the causality is
clear… lower inventory pressures prices upward, and vice-versa,
with the 6-month line marking the historical turning point between
upward and downward pressure.
Months of inventory notched up a wee bit last month, but remained at
very low levels. Thus, the upward price pressure appears
poised to continue directly ahead.
More charts below…