NAR chief economist Lawrence Yun attributed the overall increase to the improvement in housing inventory, which was up 7.3% from the previous month to a total of 1.32 million units. Unsold inventory sits at a 2.6-month supply at the current sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.

“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” Yun said. “Much of the home sales growth is still occurring in the upper-end markets, while the mid-to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”

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The median existing-home price for all housing types climbed 17.8% year over year to $359,900 – marking 133 consecutive months of annual gains. The median existing single-family home price jumped 18.6% to $367,000, and the price of an existing condo rose 14.1% to $307,100 in July.

“With median sales prices remaining close to record highs, there are prospective buyers who are priced out, and first-time buyers tend to be particularly sensitive to these elevated prices. They are also competing with an elevated share of cash buyers – up to 23% of all buyers compared to 16% a year ago,” Kan said.