In June, potential homebuyers disenchanted by elevated prices largely stayed out of the housing market, leading to a notable decline in existing home sales. According to the National Association of Realtors (NAR), sales fell by 5.4% compared to both the previous month and the same period last year. This drop occurred as home prices reached record highs for the second consecutive month.
Robert Frick, corporate economist at Navy Federal Credit Union, remarked, “Sales may be nearing rock bottom, approaching levels reminiscent of the Housing Bubble crash. This provides little solace for prospective homeowners as existing home prices continue to set new records.”
Despite these challenges, the situation for buyers may soon improve. Inventory levels showed a positive shift, with 1.32 million units of single-family homes, townhomes, condominiums, and co-ops available—up 3.1% from May and more than 23% higher than the same period last year. This increase marks a significant improvement from the historically low inventory levels that previously forced buyers into intense competition.
NAR Chief Economist Lawrence Yun noted, “We are witnessing a gradual transition from a seller’s market to a buyer’s market. Homes are remaining on the market for longer periods, and sellers are receiving fewer offers.”
High interest rates have been a deterrent for sellers, reducing the number of homes listed and exacerbating competition among buyers, which in turn has pushed prices higher. However, the rising inventory could alleviate some of this pressure.
Despite an increase in home listings, actual sales have not seen a corresponding rise. Doug Duncan, chief economist at Fannie Mae, wrote in a recent report, “While more homes are being listed, sales activity has yet to pick up. We expect home price growth to decelerate at the national level in the near term, though it will remain positive.”
