It is always about supply and demand.
In May I wrote about the factors that most affect supply and demand: the availability of jobs in the market, consumer confidence, and the affordability of housing (the cost of homeownership).
Last week, The National Association of REALTORS released the July housing report showing that existing home sales were sharply lower, but median home prices continue to rise.
Why? First demand. First time homebuyers left the market in July with the end of the tax credit. The market took buyers from the summer and early fall months and moved them into May and June. And other buyers continue to be waiting for a bottom. But that could be a risky play with median home prices rising.