The Big Story
Quick Take:
Median home sale prices hit their highest level in a year, as the spring rally has now carried prices above where they were at this time last year.
Inventory levels have plateaued heading into the summer, with a slight month-over-month decline in June.
Existing home sales posted their strongest year-over-year gain in months, though they pulled back slightly from May's pace.
Note: You can find the charts & graphs for the Big Story at the end of the following section.
*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.
Median sale prices are at their highest level in a year
The spring rally that began back in January has officially pushed median home sale prices to their highest level in a year. In June, the median home sold for $440,600, representing a 2.18% month-over-month increase and a 1.83% year-over-year gain. This marks the fifth consecutive month of month-over-month price increases, and the median sale price has now surpassed the $432,700 peak we saw in June of last year. However, the affordability picture isn't quite as rosy as it was earlier in the year. Mortgage rates ticked up slightly to 6.43% in June, and the combination of rising prices and rates that have bounced off their March lows has pushed the median monthly P&I payment up to $2,274. While that's still 1.60% lower than the $2,311 the median homeowner was paying a year ago, the gap is shrinking fast. Back in January, the median P&I payment was $1,949, so monthly payments have risen by more than $300 in just five months. If this trend continues, the affordability gains that lower rates provided earlier in the year could be fully erased by the end of the summer.
Inventory has leveled off heading into the summer
After climbing steadily from the December low of 1,230,000, inventory levels appear to have plateaued. In June, there were 1,560,000 homes available for sale, representing a slight 0.64% month-over-month decline from the 1,570,000 we saw in May, though still 1.30% higher than where we were at this time last year. On the new listings front, 463,480 new listings hit the market in June, representing a 2.45% year-over-year increase but a 2.42% month-over-month decline from May. This pullback in both inventory and new listings could signal that the spring surge of supply is beginning to taper off, which would be notable given that June and July are typically peak months for inventory. If inventory begins to decline further while demand remains strong, we could see the market tighten up heading into the back half of the summer. On the other hand, inventory levels are still roughly in line with where they were last year, so there's no reason to panic just yet.
Existing home sales are up more than 4% on a year-over-year basis
Existing home sales came in at 4,090,000 in June, representing a 4.07% year-over-year increase, the strongest year-over-year gain we've seen in quite some time. That said, sales did pull back by 2.39% from May's pace, which isn't unusual given the typical seasonality of the market. The year-over-year increase is the real headline here, as it tells us that buyers are meaningfully more active than they were at this point last year. This is likely being driven by a combination of factors: mortgage rates are still lower than they were a year ago, inventory is providing more options to choose from, and the steady march of price appreciation may be creating a sense of urgency among buyers who don't want to wait any longer. The question heading into the second half of the year is whether this momentum can be sustained. With mortgage rates hovering in the mid-6% range and monthly payments creeping higher, we could see some buyers pull back if affordability continues to erode.
Buyers are stepping up, but sellers still have the edge
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.
Right now, the national market appears to be tilting in favor of sellers. Existing home sales are up more than 4% year-over-year, which means demand is absorbing the available supply at a healthy clip. At the same time, inventory has plateaued and even declined slightly on a month-over-month basis, which means the supply side of the equation isn't growing fast enough to offset the increase in demand. If this dynamic persists through the summer, we could see months of supply tighten further, giving sellers even more leverage. However, with monthly P&I payments rapidly approaching where they were a year ago, there's a chance that demand cools off in the coming months, which would bring the market back toward balance. 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:
After five consecutive months of year-over-year declines, median sale prices in Los Angeles have returned to positive territory, with the median single-family home selling for 0.34% more than it did a year ago.
In a remarkable shift, inventory levels are now essentially flat on a year-over-year basis after months of double-digit increases.
Listings continue to move at a healthy pace, with the median listing spending just 24 days on the market in May.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
Year-over-year price growth is back in the green
This is the headline that many in the Los Angeles market have been waiting for. After five consecutive months of year-over-year median sale price declines, the streak has officially come to an end. In May, the median single-family home sold for $838,350, representing a 0.34% increase on a year-over-year basis. While the gain is modest, the significance of the reversal shouldn't be understated. Throughout the winter, there were questions about whether the Los Angeles market was entering a prolonged period of softening, but this data suggests otherwise. It's also worth noting that May's median sale price is still well below the September 2025 peak of $983,230, so there is still room for the market to run as we head deeper into the summer months.
Inventory has finally caught up with last year's levels
Perhaps the most striking development in this month's data is the inventory picture. As of May, there were 14,689 active single-family home listings on the market, which is essentially flat on a year-over-year basis at just a 0.02% decline. This is a dramatic shift from where we were earlier in the year, when inventory was running 10% or more above the prior year's levels. On a month-over-month basis, inventory rose by 3.74%, which is fairly typical for this time of year as the spring selling season pushes forward. The normalization of inventory levels is a healthy sign for the market, and it removes one of the key headwinds that was putting downward pressure on pricing earlier in the year.
Listings continue to move at a steady clip
The pace of sales has settled into a comfortable rhythm heading into the summer. In May, the median single-family home listing spent 24 days on the market, which is flat on a month-over-month basis and represents just a 4.35% increase compared to last year. After the wild swings we saw over the winter, when listings were sitting for as long as 38 days in January, the market has clearly found its footing. Buyers are engaged and making decisions relatively quickly, which bodes well for the months ahead as we move into the peak of the selling season.
Los Angeles sits just above balanced market territory
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.
As of May, Los Angeles has 3.7 months of supply on the market, which puts it just slightly above balanced territory. While this represents an 8.82% increase on a month-over-month basis from April's 3.4 months, it's actually 5.13% lower than where we were at this time last year. The fact that MSI is trending lower on a year-over-year basis, even as we move into the time of year when inventory typically peaks, is a positive sign. If demand holds up through the summer, we could see this figure push back toward the three-month mark, which would bring the market right to the doorstep of seller's market territory.
