The Big Story
Quick Take:
- Median home sale prices pulled back from June's twelve-month high, but at $434,100 they remain nearly 2% above where they stood a year ago.
- Inventory declined in July, slipping below year-ago levels for the first time in months, and new listings fell sharply from June.
- Existing home sales eased from June's pace but held slightly above last July, keeping demand roughly flat year over year.
*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.
The spring rally takes a breather, but prices are still ahead of last year
After five straight months of gains carried the median sale price to $442,800 in June, July brought the first pullback of the year. The median home sold for $434,100, a 1.96% decline from June, though still 1.97% higher than the $425,700 we saw in July of last year. A modest summer dip is not unusual, and the bigger picture is that prices have climbed roughly 9.9% since January's $395,000 trough. On the financing side, the 30-year mortgage rate eased slightly to 6.43% in July before jumping to 6.69% in August, its highest level since last summer and a meaningful move away from the 6% low we saw back in March. That combination of a slightly lower price and a slightly lower rate trimmed the median monthly P&I payment to $2,254 in July, down from $2,286 in June. The catch is that this figure is now essentially identical to the $2,253 buyers were paying a year ago, meaning the affordability advantage that lower rates delivered earlier in the year has been completely erased. With August rates moving higher, payments look likely to head back up.
Inventory turns lower, and new listings drop off fast
Inventory data runs one month ahead of the other figures, and it tells us the supply build that defined the first half of the year has reversed course. July inventory came in at 1,540,000 homes, a 1.91% decline from the 1,570,000 available in both May and June, and now 0.65% below the 1,550,000 we had at this time last year. That is a notable shift, because inventory had been running above year-ago levels through the spring. New listings reinforce the story.
Sellers brought 423,732 new listings to market in July, an 8.58% drop from June and 2.55% below last July's 434,816. Seasonality explains part of that decline, since listing activity typically peaks in late spring, but the year-over-year decrease suggests homeowners are becoming a bit more hesitant as rates push back toward 6.7%. Fewer new listings combined with steady sales activity means the pool of available homes is likely to keep thinning through the back half of the summer.
Sales cool off from June, but demand is holding its ground
Existing home sales registered 4,060,000 in July, down 1.69% from June's 4,130,000 and roughly 3% below May's 4,190,000 high for the year. On a year-over-year basis, however, sales are up 0.74% from last July's 4,030,000, which means demand is essentially holding steady rather than deteriorating. That is a reasonable outcome given what buyers are facing. Monthly payments are back to where they were a year ago, and the run of price appreciation from January through June asked buyers to stretch further with every passing month. What is encouraging is that sales have stayed in a fairly narrow band between 4,010,000 and 4,190,000 all year, showing a market that has found a floor even as financing costs have moved around. Also worth watching in the background: the Federal Reserve's mortgage-backed securities holdings continue to shrink, falling to $1.93 trillion in August from nearly $2.07 trillion last November, which removes a source of support for mortgage rates over time.
Tighter supply is helping sellers, but the national market still favors buyers
When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.
Nationally, 1,540,000 homes for sale against a sales pace of 4,060,000 homes per year works out to roughly 4.5 months of supply, which puts the country as a whole comfortably in buyers' market territory by California's three-month yardstick. That said, the trend is moving in sellers' favor. A year ago the same math produced closer to 4.6 months, and with inventory down 1.91% month over month, new listings down 8.58%, and sales holding above last year's level, supply is tightening rather than loosening. The counterweight is affordability: with the median P&I payment back at year-ago levels and August rates at 6.69%, demand could soften enough to keep the balance where it is. As always, real estate is a highly localized asset, which is why you should check out what's going on in your local market below in the Local Lowdown!
Big Story Data
The Local Lowdown
Quick Take:
- Median sale prices in Los Angeles extended their return to positive territory in June, with the median single-family home selling for $910,370, up 0.74% from a year ago and up 8.59% from May.
- Inventory has now dipped slightly below last year's mark, with July's 15,042 active listings coming in 1.16% below the July 2025 figure.
- The market's pace remains brisk, with the median listing spending 25 days on the market in June, only one day longer than a year ago.
- Months of supply fell to 3.5, down from 3.7 in May and a full half month below where it stood last June.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
Prices push back above the $900,000 line
June delivered the kind of month that confirms a trend rather than merely hinting at one. The median single-family home in Los Angeles sold for $910,370, an 8.59% jump from May's $838,350 and a 0.74% gain on a year-over-year basis. That marks the second consecutive month of year-over-year growth after a five-month stretch of declines that ran from December through April, and it suggests the softening we tracked through the winter was seasonal rather than structural.
The move back above $900,000 also puts Los Angeles roughly where it was last summer, when June 2025 came in at $903,650. The market has not yet recovered the September 2025 peak of $983,230, and June's figure sits about 7.4% below that high water mark, so there is still ground to make up. But the shape of this year's curve now closely mirrors last year's climb, and if the historical pattern holds, the late summer months are typically where Los Angeles prices do their strongest work.
Inventory slips below year-ago levels
The inventory story keeps getting more interesting. Because our inventory series runs a month ahead of the other metrics, we can already see July's count, and it came in at 15,042 active single-family listings. That is a 2.40% increase from June's 14,689, consistent with the normal seasonal build, but it is also 1.16% below the 15,219 listings on the market in July 2025.
This is a meaningful shift in tone. Through the first quarter of the year, inventory was running well above prior-year levels, and that oversupply was one of the clearer explanations for the price weakness we saw from December through April. Now the pendulum has swung the other way. Supply has flattened out, then edged into negative territory year over year, and it is doing so at precisely the point in the calendar when inventory usually tops out. If July proves to be this cycle's high, as it was in 2025, sellers should find a less crowded field competing for buyer attention through the back half of the year.
A one-day change is barely a change at all
Days on market ticked up from 24 in May to 25 in June, a nominal 4.17% increase month over month and the same 4.17% gap when measured against June 2025's 24 days. In practical terms, this is a market holding steady. Listings are moving at essentially the same clip they did a year ago, and the current pace is a world away from the 38 days recorded in January, which was the slowest reading in the entire two-year series.
What stands out is how quickly the market shed that winter sluggishness. From 38 days in January, the figure dropped to 32 in February and then to 23 in March, where it has essentially remained. Buyers who spent the winter deliberating appear to have made their decisions in the spring, and that decisiveness has carried into early summer. Worth watching: last year, days on market climbed steadily from June onward, reaching 33 by October. Whether 2026 follows that path will tell us a lot about the durability of the current recovery.
Los Angeles edges closer to balance
When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.
At 3.5 months of supply in June, Los Angeles remains modestly on the buyers' side of that line, but the direction of travel favors sellers. MSI declined 5.41% from May's 3.7 months, and more importantly it sits 12.5% below the 4.0 months recorded in June 2025. That year-over-year improvement is the most encouraging data point in this month's report, because it reflects both the flattening of inventory and the strength of transaction volume working in the same direction.
For most of the past year, Los Angeles has oscillated between roughly 3.3 and 4.5 months of supply, and the current reading sits toward the tighter end of that range. If sales pace holds through the summer while inventory rolls over from its July peak, a return to genuinely balanced conditions, or even a brief dip into seller's territory as we saw last December at 2.8 months, is well within reach.
