Sales of previously owned homes rose 2% in July compared with June to 4.01 million units, on a seasonally adjusted, annualized basis, according to the National Association of realtors. Housing analysts had been expecting a slight decline. Sales were 0.8% higher than July 2024.

There were 1.55 million homes for sale at the end of July, an increase of 15.7% from the same month last year. At the current sales pace, that represents a 4.6-month supply.

Inventory is now at the highest level since May 2020 but still well below pre-Covid years.

More inventory is clearly taking the pressure off prices. The median price of an existing home sold in July was $422,400, an increase of 0.2% from the same month a year earlier and a record high price for the month of July. Prices have been higher annually for the last 25 months, but the market may now be at an inflection point.