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The housing market continued trending more in favor of buyers in the week ahead of Independence Day, drawing more prospective homebuyers into the market.
New listings and active inventory continued to rise on an annual basis for the week ending June 28, and homes spent longer on the market, according to the Realtor.com® economic research team’s weekly housing update.
Although affordability challenges remain a key constraint, mortgage rates have now eased lower for five straight weeks, dropping to 6.67% as of Thursday, according to Freddie Mac.
Mortgage purchase applications jumped 16% last week compared with one year ago, showing renewed interest from buyers after a slow spring season, according to data from the Mortgage Bankers Association.
The uptick follows sluggish activity in May, when sales of new homes dropped 6.3% compared with a year earlier, and existing-home sales dipped 0.7% annually.
“The reduction in sales is leading to slightly higher inventory levels and will help create a more buyer-friendly housing market, but the process is expected to be a gradual one as economic uncertainty persists,” says Realtor.com senior economist Anthony Smith.
Buyers see more options as fresh listings rise
New listings rose again last week on an annual basis, up 3.8% compared with the same period last year.
The uptick in new listings is a welcome sign for buyers, who are poised to gain some negotiating power moving into the summer months.
However, the growth rate in listing activity has slowed compared with earlier weeks and remained below the year-to-date pace for the fifth consecutive week, suggesting slowing momentum in the shift toward buyers.
Homes also continue to stay longer on the market before a sale, with the median time on the market hitting 54 days last week, up five days from a year ago and similar to the pre-pandemic norm for the month of June.
As a result, the total number of homes actively for sale remains on a strong upward trajectory, now 27% higher than this time last year.
There were more than 1 million homes on the market again last week, marking the eighth week in a row over that threshold, and hitting the highest inventory level since December 2019.
Nearly all major Southern metros now exceed typical pre-COVID active inventory levels, fueled by faster new construction in recent years.
Prices tick up marginally
The list price of the typical home on the market ticked up slightly, edging up 0.2% compared with a year ago.
However, on a year-to-date basis, national median list prices are down 0.3% from a year ago, indicating a roughly flat trend.
The median list price per square foot—which accounts for changes in home size—rose 0.8% year over year for listings on the market last week.
“With inventory on the rise and more than 1 in 5 sellers cutting prices, the market is tilting back toward balance, marked by slowing price growth and increasing buyer leverage,” says Realtor.com economist Jiayi Xu.