July 04 2023
In June, median home prices slipped -0.9% year over year as new listings of homes for sale dipped 25.7% annually and fell below their previous pandemic lows
SANTA CLARA, Calif., June 29, 2023 -- The U.S. median home listing price slipped -0.9% annually in June, posting the first yearly decline since 2017, the start of Realtor.com®'s trends data, according to its June Monthly Housing Trends Report released today. At the same time, while home shoppers had more homes to choose from this month, improvement stalled as the active inventory growth rate slowed for the fourth month in a row (+7.1%) and came in well below May's +21.5% rate.
"While home asking prices grew seasonally, price gains have been weakening since last summer as rising mortgage rates have added to ongoing affordability challenges and further cooled buyer demand, so the first year-over-year decline in median list prices this month wasn't unexpected. While this could feel like a welcome relief for buyers, our revised 2023 outlook expects only a modest drop in home prices of 0.6% for the year. This may not be enough to noticeably bring down costs until the end of the year as inflation and rates start to fall too," said Danielle Hale, Chief Economist for Realtor.com®. "Fewer potential sellers opting to list their home because of the mortgage rate lock-in effect continues to be a drag on the market. Fortunately, for those willing to make a move, falling prices won't erase the substantial price gains seen the past few years, and most will likely have enough equity to come out ahead."
Affordability has evolved into an increasingly important factor in home purchase decisions, and a drop in home listing prices creates potential opportunities for buyers, especially with some creativity.
"If buyers see homes sitting on the market for a while that haven't received many good offers, there may be some opportunities for further negotiations. It never hurts to ask a seller if they would be willing to reduce their price a little, contribute to closing costs, or even buy down their mortgage rate," said Realtor.com® Executive News Editor Clare Trapasso. "While this likely won't work for the well-located, move-in ready homes oozing curb appeal, buyers may want to take another look at homes that may need a little work. Sometimes a coat of paint and minor work can make a big difference."
Recent near-record high mortgage rates and still-high listing prices continue to create affordability challenges for homebuyers, which is putting downward pressure on home list prices, which slipped annually in June for the first time since 2017. Despite high borrowing costs and a low inventory of homes to choose from in the market, homebuying sentiment continues to improve in recent months, and a new survey from Realtor.com® and Censuswide found that the vast majority of respondents, nearly 9 in 10 of those shopping, still hope to make a home purchase happen this year.
There continues to be an ongoing lack of homes for sale as potential sellers with near-record equity take a wait-and-see approach and buyers compete over the remaining available homes for sale. In June, the growth in the number of active homes for sale slowed for the fourth month in a row, and growth stalled completely in the final week of June, with the number of active homes for sale slipping below (-0.3%) year ago levels for the first time in a year (59 weeks). New listings to the market have been scarce this year too – the pace of new listings year-to-date is even lower (-16.4%) than in the first half of 2020, when the real estate market was still contending with pandemic-era closures, restrictions, and uncertainties – highlighting just how short on options buyers are in today's market.
Despite a significant slowing from the frenzied pace of the past couple years, in most areas of the country, the housing market continues to move quicker than it did in the pre-pandemic era, with homes today selling more than a week faster on average than in pre-pandemic June 2017-2019.
*Some Las Vegas listing metrics have been excluded while data is under review.
Methodology
Realtor.com® housing data as of June 2023. Listings include the active inventory of existing single-family homes and condos/townhomes/rowhomes/co-ops for the given level of geography on Realtor.com®; new construction is excluded unless listed via an MLS that provides listing data to Realtor.com®. Realtor.com® data history goes back to July 2016. 50 largest U.S. metropolitan areas as defined by the Office of Management and Budget (OMB).
About Realtor.com®
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