In June, the sales of previously owned homes saw a significant drop of 5.4% compared to May, according to the National Association of Realtors. This decline is reflective of the shift from a seller’s market to a buyer’s market. Lawrence Yun, the chief economist for the Realtors, noted that homes are remaining on the market for longer periods, and sellers are receiving fewer offers. This shift is attributed to more buyers insisting on home inspections and appraisals.
The inventory of homes for sale saw a considerable increase of 23.4% from the previous year, bringing the total to 1.32 million units by the end of June. While this rise in inventory is a positive sign, it still only represents a 4.1-month supply, well below the balanced level of a 6-month supply. This surge in inventory, however, has not had a significant impact on easing prices, with the median price of an existing home reaching $426,900 in June, marking a 4.1% increase from the previous year.
Interestingly, the higher end of the housing market has shown more resilience, with sales of homes priced over $1 million experiencing gains compared to last year. On the other hand, there has been a notable drop in sales in the $250,000 and lower range. The supply of homes for sale is weakest in the lower-priced segment, but there has been a recent surge in listings in this category. Despite the high national sales prices, new listing prices are actually lower due to an increase in smaller and lower-priced listings.
Higher-end buyers are more inclined to use cash for their purchases, with 28% of sales being all-cash transactions in June, up from 26% the previous year. However, investors have scaled back slightly, representing 16% of sales, down from 18% in the previous year. The chief economist for Realtor.com, Danielle Hale, noted that assuming the inventory continues to rise, it will either lead to an increase in home sales or a potential stabilization of prices in the market.
Overall, the housing market in June saw a shift towards a buyer’s market, with increasing inventory levels and fluctuating sales prices across different price ranges. The impact of these changing dynamics on the overall stability and future trajectory of the market remains to be seen.