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August months of supply increase from August 2007

Months of supply continued to grow in August, according to the latest press release from the National Association of Realtors.

Picture #1: Months of supply increased in August, continuing the trend that started in April of 2005. Supply in August totaled 10.4 months, compared to 9.6 months in August of 2007. 

 

Picture #2: The increase of .8 months in August was the lowest year-over-year decrease since November of 2005.

 

Picture #3: The 10.4 months of supply in August more than doubled the months of supply registered in every August during the first 6 years of the decade.

 

Adding it all up: Months of supply are increasing at a slower pace due to a decrease in inventory, but declining sales continue to push months of supply to new year-over-year highs. Note: just like any other real estate statistic, months of supply is subject to seasonal trends and should always be measured on a year-over-year basis.

Months of supply at a new high

Months of supply as calculated by the NAR continue to grow due to increasing inventory and declining sales. Here are the trends:

Picture #1: Supply, which has been growing on year-over-year basis since the middle of 2005, reached a new high of 11.2 months in July.

Picture #2: Months of supply have been growing quickly, although at slower rates in recent months. The 11.2 months in July was 1.7 months higher than the 9.5 months measured in July of 2007.

Picture #3: The 11.2 months in July more than doubles the months of supply from every other July during the first half of the decade.   

Like every other real estate metric, months of supply is subject to seasonality. It will dip this fall, and when it does, we'll be measuring it on a year-over-year basis.