Illustration by Realtor.com; Photo: Getty Images
Summer typically sees a surge in home sales, but this year, growing buyer pessimism about the state of the economy and job prospects is hampering the market’s momentum.
For the third straight week, annual price growth held steady as homes took longer to sell because of would-be buyers’ continued reluctance to venture into the market, according to the Realtor.com® Weekly Housing Trends Report released Thursday.
Realtor.com Senior Economic Research Analyst Hannah Jones says the cooling of the market is driven by a combination of rising mortgage rates and Americans’ increasingly bleak outlook.
The Fannie Mae Home Purchase Sentiment Index dropped back below 70 in June after edging up in May, fueled by a dramatic rise in job loss fears and continued wariness about the future trajectory of mortgage rates.
In this month’s Fannie Mae survey, 29% of respondents reported that they are concerned about becoming unemployed in the next 12 months, even though June saw more jobs added to the U.S. economy than expected.
“When consumers do not feel confident about their financial future, they are far less inclined to take on a major expense like a home purchase, and the growing concerns of a tariff-induced recession are having a significant impact on the outlook of the housing market,” according to Realtor.com Senior Economist Joel Berner.
Price growth stagnates as homes stand unsold
For the week ending on July 12, the median listing price once again inched up 0.2% on an annual basis for the third week in a row—but was still down 0.3% year to date.
Homes waited six days longer to sell than a year ago, signaling an increasingly sluggish market pace.
Nationally, the typical listing waited for a buyer 57 days last week, the same as in July 2019.
New listings tick up as overall inventory climbs
Fresh listings—the measure of homeowners putting properties up for sale—rose last week by 1.3% compared to a year ago.
The June Housing Report showed that new listings declined month over month for the second consecutive month after peaking in April, a sign that homeowners are feeling less motivated to dip their toe into the market amid flagging buyer demand.
The overall number of for-sale dwellings increased 25.1% year over year, slowing slightly from the previous week. Nevertheless, this represents the 88th consecutive week of annual gains in inventory.
“Despite steady gains in active inventory, the pace of improvement continues to taper as the market settles into a slower summer rhythm instead of picking up the pace,” says Jones. “New listings were nearly flat year-over-year, signaling that seller momentum may be losing steam faced with lackluster buyer demand in much of the country.”
In some good news, there were more than 1 million homes available on the market across the U.S. last week, marking the 10th week in a row over the six-figure threshold—and the highest inventory level since November 2019.
“While choices for buyers have expanded, affordability constraints continue to limit buyer activity,” adds Jones. “The lack of significant buyer response to substantial gains in for-sale inventory has pushed many sellers to reduce price.”
Notably, the share of listings offering price cuts reached a level of 1 in 5 homes last month, the highest in the data’s history.
“The market continues to soften and shift towards more buyer favorability,” says Jones. “However, without significant movement in mortgage rates of home prices, many buyers are still unable to take advantage.”