The Big Story

Quick Take:
Median home sale prices surged past last year's levels in May, as the spring selling season continues to build momentum.
Inventory levels have climbed back to where they were at this time last year, giving buyers more options heading into the summer.
Existing home sales posted their strongest year-over-year gain in quite some time, signaling that buyers are finally coming off the sidelines.
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.

The spring rally is in full swing

The spring selling season has delivered exactly the kind of price action that sellers were hoping for. The median home sold for $429,300 in May, representing a 2.83% month-over-month increase and a 1.32% year-over-year gain. This marks the fourth consecutive month of month-over-month price increases since the market bottomed out at $395,000 in January, and it's the highest median sale price we've seen since last summer. Helping fuel this rally is the fact that mortgage rates have come back down a bit after their April spike, settling at 6.37% in May, which is 5.77% lower than the 6.76% we were seeing at this time last year. That said, the median monthly P&I payment came in at $2,201, which is only 2.57% lower than the $2,259 the median homeowner was paying a year ago. The affordability gap is narrowing, as rising prices are beginning to eat into the savings that lower rates have provided. It'll be worth keeping a close eye on this dynamic as we move deeper into the summer months.

Inventory is back to last year's levels just in time for the summer rush

After spending much of the winter and early spring playing catch-up, inventory levels have finally returned to where they were at this time last year. In May, there were 1,550,000 homes available for sale, representing a 0.65% year-over-year increase and a 3.33% month-over-month gain. While the year-over-year increase is modest, it's encouraging to see inventory keeping pace with last year's levels, especially considering how tight supply has been for the past several years. On the new listings front, 474,976 new listings hit the market in May, representing a 2.12% year-over-year increase, though this was a slight 0.45% decline from April's pace. This tells us that sellers are still actively listing their homes, but the initial spring rush may be tapering off just a bit. If inventory continues to build through June and July, buyers heading into the summer could find themselves with the most options they've had in years.

Buyers are back, and they're buying

Perhaps the most encouraging data point this month is the significant uptick in existing home sales. In May, 4,170,000 homes changed hands, representing a 3.22% increase on both a month-over-month and year-over-year basis. This is a meaningful shift from the sluggish sales figures we've been tracking over the past several months, and it suggests that the combination of lower mortgage rates and growing inventory is finally pulling buyers off the sidelines. It's also worth noting that this is the highest existing home sales figure we've seen since December, when the market saw its seasonal year-end push. If this momentum carries through the summer, we could be looking at one of the more active selling seasons we've seen in recent years. Of course, the big wildcard here is mortgage rates. If rates continue to decline, it could add even more fuel to the fire. But if they tick back up, as they did in April, it could pump the brakes on what has been a very promising start to the summer.

The tug-of-war between buyers and sellers continues

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 finds itself in an interesting position. Inventory is growing, but existing home sales are growing right along with it, which means the months of supply on the market hasn't shifted dramatically in either direction. The fact that both supply and demand are ticking up simultaneously tells us that we're in a relatively balanced market at the national level. However, the direction of mortgage rates over the next couple of months will likely determine which way the scale tips. If rates continue their downward trajectory, demand could outpace supply, pushing us back toward a seller's market. On the other hand, if rates climb again, inventory could pile up, giving buyers the upper hand. 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:
Year-over-year median sale price declines have now stretched to six consecutive months, though the gap continues to narrow, with April's decline coming in at just 0.57%.
Inventory levels are still ahead of last year, but the year-over-year gap has shrunk to just 3.39% heading into May.
Listings are spending roughly the same amount of time on the market as they were a year ago, with the median listing sitting for 24 days in April.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Price declines continue, but the gap keeps getting smaller

The Los Angeles market has now posted six consecutive months of year-over-year median sale price declines, but the trajectory tells a much more nuanced story. In April, the median single-family home sold for $845,410, representing just a 0.57% decline on a year-over-year basis. To put that in perspective, we saw declines of 2.35% in December and 1.12% in February, so the market has been steadily closing the gap with each passing month. On a month-over-month basis, the median sale price actually climbed from $828,300 in March to $845,410 in April, which is right in line with the seasonal appreciation we typically see as the spring market heats up. If this trajectory holds, we could very well see the year-over-year decline streak come to an end in the near future.

The inventory gap with last year continues to shrink

One of the more interesting developments in the Los Angeles market over the past few months has been the narrowing of the year-over-year inventory gap. As of May, there were 14,159 active single-family home listings on the market, representing a 3.39% increase on a year-over-year basis. While inventory is still higher than it was last year, that gap has come down substantially from the double-digit increases we were seeing earlier this year and throughout much of 2025. On a month-over-month basis, inventory rose by 4.89%, which is to be expected as we move deeper into the spring selling season. The gradual normalization of inventory levels is a healthy sign for the market, as it suggests that demand is beginning to keep pace with the supply coming online.

Listings are moving at roughly the same pace as last year

After a winter that saw listings sitting on the market for considerably longer than the year prior, the spring market has brought things back into alignment. In April, the median single-family home listing spent 24 days on the market, representing just a 4.35% increase on a year-over-year basis. When you consider that listings were sitting for 38 days back in January, the improvement has been dramatic. This acceleration is a strong indicator that spring buyers are actively engaging with the market, and the additional inventory that has been building over the past several months doesn't appear to be slowing them down.

Los Angeles is hovering right around 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.

After spending much of the winter deep in buyers' market territory, the Los Angeles market has gradually shifted back toward equilibrium. As of April, there were 3.4 months of supply on the market, representing a 5.56% decline on a year-over-year basis and a 2.86% decline month-over-month. This puts the market just slightly above balanced territory, and it continues the steady downward trend we've seen since January's peak of 4.5 months. With the busiest months of the year still ahead of us, there's a real possibility that Los Angeles pushes into seller's market territory before the summer is over.

Local Lowdown Data

Justin Bonney, luxury real estate agent serving Sherman Oaks and the San Fernando Valley

About Justin Bonney

Justin Bonney is the Founding Broker of Clear Way Real Estate and a lifelong San Fernando Valley resident. Licensed in California since 2002 and a broker since 2008, he helps buyers, sellers, and investors make clear, strategic real-estate decisions throughout the Valley. Across Google, Zillow, Yelp, Facebook, and Realtor.com, Justin’s profiles display 400+ five-star reviews.

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