I came across some interesting reporting from HousingWire this week about existing home sales data that's worth talking through. According to their coverage, the most recent existing home sales numbers actually came in better than what folks were expecting. We saw a month-to-month bump in activity, though when you look back to the same time last year, sales are down compared to then. The thing is, this data has a built-in lag, and it probably doesn't capture what's been happening with mortgage rates climbing back above seven percent recently.
Here's what the National Association of Realtors reported: existing home sales moved up about one and a half percent from the previous month, but they're down roughly two percent from a year earlier. Now, that year-over-year comparison is a bit tricky because last year at this time rates were considerably lower, and demand actually peaked around December. So when you're comparing to those stronger numbers from a year ago, it's tough to show growth even if current conditions might support it.
The reporting notes that inventory is sitting at about one point six million homes right now, which is still below what's considered normal. According to HousingWire, healthy inventory levels should be somewhere between two to two point five million homes. What's worth noting is that we've now seen four straight calendar years with home sales at historically low levels when you adjust for population and the labor force. Despite that, we're still working our way back to where inventory should actually be.
One perspective shared in the article is that this report might not be telling us the full story about where the market is heading. Since rates moved above seven percent back in twenty twenty-two, we've generally seen demand soften, so the expectation is that we'll continue to see more slowness going forward. That said, HousingWire points out there's actually a positive angle here: we're in a healthier situation than the pandemic years when prices were exploding upward. Now we've got better inventory levels, slower price growth, and buyer power has returned to the table.
What I am seeing locally in the Bay Area and East Bay is that this inventory improvement is real and it's starting to matter for our clients. When you step back from the headlines, the fundamental story is becoming more balanced between buyers and sellers, and that's good news for everyone trying to make rational decisions about their home purchases or sales.
