July Housing Inventories

The National Association of Realtors reports that existing home inventories rose to 2.751 in July from 2.653 million in June. Since sales remained strong (7.16 million units vs. 7.33 million annual rate for June), the months of supply only increased to 4.6 months from 4.3 months in June.

Both numbers were better than I expect (sales were higher, inventory lower). They indicate a return to a more "normal" market and not the end of the housing boom - yet.

Year over year (July '04 to July '05) this is a 12.6% inventory increase.

Update: From Bloomberg:

"We are starting to see more houses coming into the market," and that is a sign of a turn, Harris said. "First you see inventories rising, then you see a flattening of prices and then you start to see people have difficulty selling houses because buyers have more options and they get more demanding."

A total of 2.75 million homes were for sale last month, the most since May 1988.